HP has unveiled a two-year restructuring plan to become 'more digitally enabled' and will reduce its global headcount of 55,000 by about 7,000-9,000. There's no indication yet of whether the plan will impact HP staff numbers in Australia and New Zealand.
“The company expects to reduce gross global headcount by approximately 7,000-9,000 employees through a combination of employee exits and voluntary early retirement,” the print giant said in a statement from its headquarters in Palo Alto, California. “The company estimates that it will incur total labour and non-labour costs of approximately $1.0 billion in connection with the restructuring and other charges, with approximately $100 million in fiscal Q4 of 2019, $500 million in fiscal 2020 and the rest split between fiscal 2021 and 2022. These actions are expected to be completed in fiscal 2022. The company estimates that these actions will result in annualized gross run rate savings of about $1.0 billion by the end of fiscal 2022.”
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| "Bold and decisive actions": Enrique Lores, incoming president and CEO, HP |
Based on the current environment, HP anticipates generating free cash flow of at least $US3.0 billion for fiscal 2020.
“We are taking bold and decisive actions as we embark on our next chapter,” said Enrique Lores, incoming president and CEO, HP Inc. “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. We will become an even more customer-focused and digitally enabled company, that will lead with innovation and execute with purpose.”
HP’s board has authorized an additional $US5.0 billion for future repurchases of its outstanding shares of common stock. HP intends to use the additional authorization to repurchase its shares from time to time to offset the dilution created by shares issued under employee stock plans and to repurchase shares opportunistically.
“I’m proud of the progress we have made across our business with cutting edge innovation, disciplined execution and a purpose driven culture,“ said Dion Weisler, president and CEO, HP Inc. “I have no doubt our team will keep raising the bar under Enrique’s leadership.”
A webcast of the announcement, along with management presentations and other materials, is available at www.hp.com/investor/SAM2019
