It has been a hell of a year for tech industry.
The trend of layoffs in the tech sector is continuing with the axe falling at HP (HPQ). The company will shed between 4,000 and 6,000 jobs by the end of its 2025 fiscal year as part of its “Future Ready” strategy. CEO Enrique Lores admitted that after a difficult fiscal fourth quarter, and not-so-great outlook, cutting potentially more than 10% of HP’s workforce was necessary.
“Wage growth data indicates that highest wage earnings saw the largest decline in real wages, whereas lowest earners’ wage growth largely matched inflation,” BofA wrote in a note. “As a result, companies are seeing high-income consumers trading down for cheaper goods/services – mentions of ‘trade down’ during earnings calls soared to a record level, topping the GFC level.”
Discussing HP’s results and outlook, Lores said that the “ultimate goal” of the company was to develop its product portfolio and “operational capabilities to drive sustainable growth” and save as much money as possible during what is expected to be a prolonged period of economic uncertainty, inflation and some declines in customer demand.
Conference call: “We take (job) reductions very seriously,” CFO Marie Myers declared, adding that the steps HP was taking were “critical to the long-term health” of the long-time PC and printing technology leader. In the meantime, factors such as “headwinds to long-term growth” are going to be around for a while.