Hewlett Packard will let go of about 7,000 to 9,000 jobs through a combination of employee exits and voluntary early retirement, as stated in a report.
Furthermore, Hewlett Packard assumes the plan will result in annual gross run-rate savings of about $1 billion by the end of fiscal 2022.
Reuters reported that the company had about 55,000 employees worldwide as of Oct. 31, according to a filing with the U.S. Securities and Exchange Commission. That would mean up to 16% targeted in the cuts, as calculation showed.
In link with the restructuring, HP said it expects to incur an overall charge of about $1 billion, of which $100 million will be realized when it reports its fourth-quarter earnings.
Sources suggest that the company’s chief executive officer stated that “We are taking bold and decisive actions as we embark on our next chapter. We see significant opportunities to create shareholder value and we will accomplish this by advancing our leadership, disrupting industries and aggressively transforming the way we work.”
HP expects to generate free cash flow of at least $3 billion in fiscal 2020 and return at least 75% to shareholders through a 10% quarterly dividend increase and share buybacks, it added.
The company said it expects its adjusted earnings in the range of $2.22 to $2.32 per share for fiscal 2020.
For the current fiscal year, it expects adjusted earnings to be in the range of $2.18 to $2.22, the company said when reporting its third-quarter earnings.