HP Inc said it was accelerating its restructuring programme and now expects about 3,000 people will exit by the end of fiscal 2016 instead of over three years as it announced in September.
Then, Hewlett-Packard Co had said it expected to cut about 33,300 jobs over three years, of which up to 3,300 were to be cut in HP Inc. It said then that 1,200 people would leave the company by the end of 2016.
The restructuring will result in charges and associated cash payments of about $300 million in the current year, the company said.
"This move is basically HP Inc embracing the tough pricing environment and shifting their focus to building their portfolio," says Shannon Cross, an analyst for Cross Research.
HP Inc, which houses former Hewlett-Packard Co's legacy hardware business, reported a near 12 percent drop in quarterly revenue, as it struggles with weak demand for PCs and printers.
Revenue in the company's personal systems business fell 13 percent in the first quarter ended Jan. 31, while it declined 17 percent in its printing division from a year earlier.
PC sales have been falling sharply worldwide, and the launch of Windows 10 has so far failed to rekindle demand.
Printer demand has been hurt as corporate customers cut printing costs and consumers shift to mobile devices.
The company, which is reporting results independently for the first time since being spun off from Hewlett-Packard Co, forecast adjusted profit of 35-40 cents per share for its second quarter ending April 30.
Analysts on average were expecting 39 cents, according to Thomson Reuters I/B/E/S.
HP Inc maintained its 2016 adjusted profit forecast at $1.59-$1.69 per share.
The company's earnings from continuing operations fell to $650 million, or 36 cents per share, in the first quarter from $770 million, or 41 cents per share, a year earlier.
Revenue fell to $12.25 billion from $13.86 billion.
Analysts on average had expected earnings of 36 cents per share and revenue of $12.20 billion.
HP Inc's shares were marginally lower at $10.75 in extended trading on Wednesday. They had fallen more than 13 percent since the spinoff in early November to Wednesday.
Hewlett-Packard Enterprise Co, also spun off from Hewlett-Packard Co, is expected to report results on March 3.
(Reporting by Alan John Koshy in Bengaluru; Editing by Sriraj Kalluvila and David Gregorio)
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Published Date: Feb 25, 2016 06:00 am | Updated Date: Feb 25, 2016 06:00 am