In order to trim their costs, for the next three years, HP is preparing to layoff 3,000-4,000 of their employees. This statement was made on Thursday.
The business that specializes in computers and printers, which was recently separated from the sexier cloud and Software Company, which is now called Hewlett Packard Enterprise, continues to struggle as the demand for their products decline. Dion Weisler, HP CEO showed his happiness with the progress that the company has made, during their first year. The CEO went on to say, “Our markets remain very challenged.”
Laying off approximately 4,000 employees will save the company between $200 million and $300 million, annually. The savings will not begin until 2020. Before the savings will happen, there will be charges between $350 million and $500 million. $200 million of the charges will come from the workforce being reduced. On Thursday, HP announced expectations of increasing their earnings from $1.55 to $1.65 per share for fiscal 2017. The analysts have provided estimates around $1.64 share. They also have predict a $2.3 billion to $2.6 billion of free cash flow. HP believes that 75% of the cash flow will be returned to their shareholders. The 7% increase in dividends to 13 cents per share was authorized by HP’s board. They also okayed $3 billion in additional stock buybacks.
It isn’t the first time that employees of HP has been laid off. Earlier in the year, HP made plans to speed up their layoff process and have 3,000 released by Christmas. Currently, HP is employing approximately 50,000 employees. Recently, HP shares dropped by 2%. Overall, the company has had a 25% increase.