Another tech company is announcing massive layoffs

Personal computer company HP will lay off between 4,000 and 6,000 employees, joining other companies in the technology sector as they make efforts to reduce headcount amid economic headwinds.

The company reported fourth-quarter net sales of $14.8 billion, down from $16.7 billion in the same period last year. The payroll reduction effort, which will be completed by the end of fiscal year 2025, will save approximately $1 billion.

“Looking forward, the new Future Ready strategy we introduced this quarter will allow us to better serve our customers and drive long-term value creation by reducing our costs and reinvesting in key growth initiatives to get our business ready. steam for the future,” said HP CEO Enrique. Lores said in the earnings report.

HP, not to be confused with Hewlett Packard Enterprise, a business-to-business spin-off founded in 2015, currently employs approximately 51,000 people. The company announced efforts three years ago to eliminate 7,000 and 9,000 employees.

The PC maker is one of many tech companies to announce massive layoffs. Companies such as Amazon, Microsoft and Tesla have announced breaks or layoffs for their offices in recent months, citing recession risk and broader economic uncertainty. Leaders in industries such as media and entertainment are pointing to similar issues in workforce reduction efforts.

Despite an increase in economic output in the third quarter, the United States was more likely to meet the rule-of-thumb definition of a recession, two consecutive quarters of negative growth, as output shrank 1.6% year-on-year in the first quarter and contracted 0.6% year-on-year. % on an annual basis. % pace in the second quarter. In order to cope with persistently high inflation, policymakers at the Federal Reserve raised target federal funds rates by several 0.75% increments in the second half of this year. Federal Reserve Governor Christopher Waller warned that the measures would lead to higher unemployment rates.

Some investors have criticized technology companies for inflating their payrolls in recent years. Brad Gerstner, CEO of Altimeter Capital Management, said in a letter to Mark Zuckerberg, CEO of Meta, that the company, which more than tripled its workforce over the past four years, should lay off employees to reduce costs in a tougher macro environment. economic landscape.

“It’s a poorly kept secret in Silicon Valley that companies ranging from Google to Meta to Twitter to Uber could make similar revenues with far fewer people,” the investor wrote. “I would take it a step further and argue that these incredible companies would run even better and more efficiently without the layers and lethargy that come with this extreme headcount growth.”

Twitter CEO Elon Musk, who acquired the social media platform last month, immediately moved to lay off half of the company’s employees. In an email to the remaining staff, he said they must be prepared to work “long hours at high intensity” to maintain their positions. “Twitter will also be much more technically driven,” Musk continued. “Design and product management will still be very important and report to me, but those who write great code will make up the majority of our team and have the greatest influence. Essentially, Twitter is a software and server company, so I think this makes sense.”

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