The layoffs come one year after HP Inc., the manufacturer of printers, laptops and personal computers, was spun off from Hewlett-Packard in Silicon Valley’s biggest corporate breakup. The other company in the split, HP Enterprise, provides data center technology and business services.
HP Inc. CEO Dion Weisler said the cuts would allow the company to remain profitable and look for new growth opportunities in a difficult market for printers and computers.
“Our focus is clear, our execution is solid, and we are positioned well for the next step in our journey,” Weisler said in a statement. “Although our markets remain very challenged, we are committed to innovating in the core and continue to see long-term growth opportunities.”
Weisler said the company sees opportunity in commercial mobility and services, the disruption of certain segments of the copier market, and the spread of 3-D printing for manufacturing.
The company did not specify where the cuts would be made. It noted that reductions will vary by country and include input from local employee councils and representatives.
Rob Enderle, principal analyst for the Enderle Group, said he expects cuts to come from the printer and supply business. “Printing isn’t coming back,” he said. “They’ve got to reduce costs in line with market reduction.”
HP Inc. has about 50,000 employees worldwide. The cuts are expected to continue through 2019. The company expects the restructuring will cost between $350 million and $500 million, with severance and labor reduction costs of about $200 million. It expects to save about $200 million to $300 million annually from the restructuring.
HP Inc. delivered the news to analysts in New York during a presentation on the company’s 2017 outlook and strategy. It also expects to increase quarterly dividends by 7 percent.
HP Inc. stock dropped about 1 percent on the news.
The once-thriving computer and printer market has shrunk in recent years, as consumers move toward mobile devices and away from desktops, laptops and printers.
Last month, HP Inc. reported better-than-expected sales in the third quarter, but sales still dropped from the previous year. Personal computer sales were flat at $7.5 billion, while printer sales fell 14 percent, to $4.4 billion.
HP Chief Financial Officer Cathie Lesjak said the company remains a good investment, delivering “strong operating margins and cash flow.”
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