Computer and printer maker HP Inc. said on Tuesday that it plans to lay off 4,000 to 6,000 employees over the next three years—making it the latest tech company to announce job cuts or hiring freezes.
HP Inc.’s layoffs, which represent nearly 10% of its current workforce, are part of a broader cost-cutting plan that comes amid declining sales and a souring economy. On Tuesday, the company said fourth quarter revenue had dropped 11.2% from the same period a year earlier, to $14.8 billion.
The company partly blamed weak desktop computer sales, a problem impacting companies across the PC industry in recent months. Fourth-quarter sales in HP Inc.’s division that includes computers dropped 13% year-over-year to $10.3 billion, driven largely by a 25% decline in consumer revenue.
In a statement, HP Inc. CEO Enrique Lores described it as a “volatile macro-environment” and cited “softening demand” for his company’s products over the last six months.
HP Inc.’s layoffs coincide with a wider retrenchment by the tech sector due to growing recession fears brought on by high inflation and high interest rates. Last week, Amazon announced 260 layoffs and hinted that there’d be more next year, saying the economy was in a “challenging spot”. Some reports say Amazon plans to lay off up to 10,000 employees.
Earlier this month, Facebook parent Meta said it would cut 11,000 employees. Meanwhile, Twitter, after being acquired in October by Tesla CEO Elon Musk, laid off more than half of its workforce. And last month, Microsoft announced layoffs across multiple divisions.
HP’s latest layoffs come more than three years after previous job cuts in 2019 of 7,000 to 9,000 employees.
Without directly addressing the latest layoffs, Lores told the Wall Street Journal that he’s preparing for a downturn that could last at least into 2024, saying “it’s prudent not to assume that the market will turn during 2023.”
The layoffs, plus a reduction in the company’s real estate footprint, are expected to save the company $1.4 billion in annualized spending by the end of 2025’s fiscal year. It expects the restructuring to cost around $1 billion.
A spokesperson for HP Inc. told Fortune that the layoffs are “the toughest decisions, because they impact colleagues we care deeply about. We are committed to treating people with care and respect—including financial and career services support to help them find their next opportunity.”