After HP reported a fiscal first quarter that was in-line with what the Street expected, the CEO delivered a less-than-inspiring update on growth and restructuring.
In his remarks to analysts on Wednesday, HP CEO Dion Weisler said that he wants to hurry up and trim costs, so he’ll be laying off 3,000 people in 2016.
The company had already announced it would cut those 3,000 back in September, before HP and Hewlett-Packard Enterprise (HPE) split apart, during HP’s Security Analyst Meeting (SAM).
That’s when the leaders of HPE mentioned they would be cutting another 25,000 to 30,000 people after the split, and HP said it had 3,000 more jobs to cut. Prior to the split the combined HP had already cut over 51,000 people over the past couple of years.
But the plan for both new companies would be to do the layoffs slowly, over a couple of years. On Wednesday, Weisler said he wasn’t going to wait, and would do it all in 2016, and said there was probably more cost-cutting to come, too:
“We are accelerating the restructuring program also announced at SAM by increasing the fiscal 2016 employee reductions to approximately 3,000. I believe there may be even more opportunity to reduce cost and streamline processes, and we will share details when finalised.”
His CFO Cathie Lesjak said that HP had already cut about 400 people in its first quarter, so HP has another 2,600 to go. She expects the layoffs to cost $300 million, and save the company the same amount starting next year.
Along with this restructuring, investors also grew nervous about the potential for growth in the shrinking printer and PC markets that HP plays in. While its EPS of 36 cents and sales of $12.2 billion met expectations, the expectations weren’t very high. Revenue was down 12% from the prior-year period.
Weisler said he was also disappointed in sales of new Windows 10 devices, saying that “we have not yet seen the anticipated Windows 10 stimulation of demand that we would have hoped for.”
The stock is down about 4% on Thursday.
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