US personal computer maker HP said on Thursday (Oct 3) it will cut up to 16 per cent of its workforce as part of a restructuring plan aimed at cutting costs.
The company will cut about 7,000 to 9,000 jobs through a combination of employee exits and voluntary early retirement, it said in a statement.
HP estimates the plan will result in annual gross run-rate savings of about US$1 billion by the end of fiscal 2022, it added.
The company had about 55,000 employees worldwide as of Oct 31, according to a filing with the US Securities and Exchange Commission. That would mean up to 16 per cent targeted in the cuts, Reuters calculation showed.
In response to questions from CNA, HP said that the job cuts were necessary for the company's future.
"To create the necessary capacity to reinvest in our business requires us to make some difficult decisions that impact a significant number of our colleagues," a spokesperson from HP's Singapore office told CNA.
The spokesperson declined to answer when asked if there would be job cuts in Singapore.
In connection with the restructuring, HP said it expects to incur an overall charge of about US$1 billion, of which US$100 million will be realised when it reports its fourth-quarter earnings.
"We are taking bold and decisive actions as we embark on our next chapter," said Enrique Lores, the company's incoming chief executive officer.
"We see significant opportunities to create shareholder value and we will accomplish this by advancing our leadership, disrupting industries and aggressively transforming the way we work."
Lores will take over the CEO position on Nov 1 from Dion Weisler.
Palo Alto, California-based HP also said its board on Sep 30 approved an additional US$5 billion in share buybacks.
HP expects to generate free cash flow of at least US$3 billion in fiscal 2020 and return at least 75 per cent to shareholders through a 10 per cent quarterly dividend increase and share buybacks, it added.
The company said it expects its adjusted earnings in the range of US$2.22 to US$2.32 per share for fiscal 2020.
For the current fiscal year, it expects adjusted earnings to be in the range of US$2.18 to US$2.22, the company said when reporting its third-quarter earnings.
HP's shares have fallen about 10 per cent this year up to Thursday's close.