HP Inc. (HPQ), the leader in the global PC market, this week said more employees than initially estimated would be laid off by the end of fiscal 2019 as part of the comprehensive restructuring program initiated last year.
When the consumer hardware division of the erstwhile Hewlett-Packard Co. first announced the restructuring program a couple of years ago, it was expected that around 4,000 employees would be leaving the company by the end of fiscal 2019. The number of affected workers accounts for nearly 10% of the total workforce.
The company now estimates that 4,500-5,000 employees would be affected. Consequently, there will be a $200-million increase in the projected pre-tax charges associated with the layoffs to $700 million, primarily related to severance.
HP employed around 49,000 persons when it started the workforce reduction in fiscal 2017. According to the company, the downsizing is necessitated by the mounting costs and growing competition in the PC market.
HP now estimates that 4,500-5,000 employees would be affected by its comprehensive restructuring program
It is expected that the overhauling will affect employees across the board in all geographies. However, the company is yet to disclose whether workers of its Australia, New Zealand and ASEAN divisions would be affected or not.
The California-based HP had reported a marked increase in sales to $14 billion in the latest fiscal quarter and raised its fiscal-2018 earnings outlook beyond market estimates.
Ever since HP was created by splitting Hewlett-Packard Co. in 2015, the company made significant strides in capturing market share for its PC segment by rolling out new premium models, despite a sharp fall in demand worldwide. A revamped printer portfolio and the company’s recent foray into gaming machines also added to profitability.
HP shares gained nearly 3% in the pre-market trading Wednesday, continuing the steady uptrend started at the beginning of the month.