HP, which makes most of its money by selling computers, has been navigating a sustained downturn in PC demand. It began with lower-end consumer products but has spread as companies reduce their workforces and curb technology investment, Lores said. Industry analyst Gartner Inc. said global PC shipments declined almost 20% in the third quarter – the biggest fall since it began tracking the metric in the mid-1990s. Dell Technologies Inc., which generates 55% of its revenue from PC sales, on Monday gave a lacklustre outlook for the current quarter and said some customers have “paused purchases” in the near term.
HP Inc. will eliminate as many as 6,000 jobs over the next three years amid declining demand for personal computers that has cut into profits. Earnings, excluding some items, will be US$3.20 to US$3.60 a share in the fiscal year ending in October 2023, HP said Tuesday in a statement. Analysts, on average, projected $3.61 a share, according to data compiled by Bloomberg. Free cash flow will be about US$3.25 billion, which also falls short of estimates.
The forecast assumes a 10% decline in computer sales in the fiscal year, Chief Executive Officer Enrique Lores said in an interview. “We expect a challenging market environment,” he said.
