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US Tech Giant Hewlett Packard Plans Up to 6,000 Job Cuts

The logo for The Hewlett-Packard Company is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, US, June 27, 2018. REUTERS/Brendan McDermid/File Photo
The logo for The Hewlett-Packard Company is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, US, June 27, 2018. REUTERS/Brendan McDermid/File Photo
    Asharq A-Awsat
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US Tech Giant Hewlett Packard Plans Up to 6,000 Job Cuts

The logo for The Hewlett-Packard Company is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, US, June 27, 2018. REUTERS/Brendan McDermid/File Photo
The logo for The Hewlett-Packard Company is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, US, June 27, 2018. REUTERS/Brendan McDermid/File Photo

PC-maker Hewlett Packard on Tuesday said it would layoff as many as 6,000 employees over the next three years as the slumping world economy continues to embroil the US tech sector.

HP, which has a payroll of about 61,000 people, said it aimed to secure $1.4 billion in annual savings through 2025 as it followed the cost-cutting path of other tech giants such as Facebook-owner Meta, Amazon and Twitter.

The plan "will enable us to better serve our customers and drive long-term value creation by reducing our costs and reinvesting in key growth initiatives to position our business for the future," HP CEO Enrique Lores said in a statement.

Meta said earlier this month it will lay off more than 11,000 of its staff and Twitter saw half of its 7,500-strong employees culled just days after the company was taken over by billionaire Elon Musk in late October.

"These are the toughest decisions we have to make, because they impact colleagues we care deeply about. We are committed to treating people with care and respect..." an HP spokesperson said in an email to AFP.

HP, which makes computer hardware and printers, announced the layoff plan as it announced an 11.2 percent fall in revenues to $14.8 billion for the final fiscal quarter of 2022.

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Meta Shows Strong Growth as AI Spending Surges

The Meta logo is seen at the Vivatech show in Paris, France, Wednesday, June 14, 2023. (AP)
The Meta logo is seen at the Vivatech show in Paris, France, Wednesday, June 14, 2023. (AP)
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Meta Shows Strong Growth as AI Spending Surges

The Meta logo is seen at the Vivatech show in Paris, France, Wednesday, June 14, 2023. (AP)
The Meta logo is seen at the Vivatech show in Paris, France, Wednesday, June 14, 2023. (AP)

Facebook owner Meta saw net income and revenues top expectations on Wednesday as the company said it would expand investments into artificial intelligence, drawing nervousness from investors.
The social media behemoth, which is also the parent company of Instagram and WhatsApp, said net profit in the third quarter was $15.7 billion -- up 35 percent on the same period last year, AFP said.
Revenues rose 19 percent to $40.6 billion, slightly higher than analyst estimates.
But investors sent Meta shares lower in after hours trading over the outlook for AI spending in the months ahead and another big loss at its virtual and augmented reality arm, Reality Labs.
"Our AI investments continue to require serious infrastructure, and I expect to continue investing significantly there, too," Meta's founder and chief executive Mark Zuckerberg told analysts.
"We haven't decided on a final budget yet, but those are some of the directional trends," he added.
Meta's share price slipped nearly three percent after its earnings results were published.
Like its Big Tech peers, Meta is rushing into artificial intelligence as it tries to build revenue streams away from its social media core business.
In recent months Zuckerberg has put most of his attention and spending on the company's AI innovations that have been rolled out as chatbots across its platforms or used to upgrade its ad tech.
On Wednesday, Meta once again raised its capital investment outlook: for 2024 alone, it is forecasting a range of $38-40 billion, compared with $37-40 billion previously, much of it for AI.
'Rising costs'
Investors "were a little disappointed by the rising costs" said Jasmine Enberg of Emarketer.
"It's going to take longer time to pay off" than some had hoped, she added.
In the first quarter this year, the spending had already caused concern among investors, despite a doubling of earnings.
But a quarter later, Meta's results impressed investors with a further surge in profits, showing that its core ad business could support the investments.
"Meta's solid revenue growth in the quarter will help stave off investor concern about its AI investments," said Debra Aho Williamson of Sonata Insights, who added that these investments were making it easier to post ads on the platforms.
However, she warned, that the full impact of consumer facing AI "won't be felt until 2025 or beyond."
Reactions were positive last month when the company unveiled its Orion augmented reality glasses, which remain experimental but bolstered confidence that Meta will be a leader in the AI wearable space.
Meta also hopes to ride on the excitement of its Ray-Ban Meta smart glasses, which it developed with EssilorLuxottica, the European eyewear giant.
Analysts believe that the glasses could be a hot item during the end-of-year holiday season.
But the recurring losses at Reality Labs, the VR division, continued to weigh on investors minds. The division posted $270 million in revenues in the third quarter -- and $4.4 billion in operating losses.