New CEO Of HP Inc (NYSE:HPQ) Aims To Save $1 Billion Annually By Reducing Staff Of Up to 9,000

Enrique Lores, the new Chief Executive Officer of HP Inc (NYSE:HPQ), unveiled restructuring plans that could save $1 billion annually and improve printer and ink sales. If implemented, around 9,000 employees would lose their jobs. The new restructuring initiative would slash the HP rankings by 16%.

Eliminate 9,000 jobs in 3 years

According to a communicative released on Thursday, HP would eliminate up to 9,000 in the next three years. The company has 55,000 employees on its payroll as of today. As part of the 3-year old lay-off plan, which is nearing the end, it could eliminate five thousand jobs.

HP has been making handsome profits from its printing supplies business. But, now it is under pressure owing to dwindling sales of printing supplies. The company plans to try innovative ways to boost printing supply sales. Hewlett Packard Enterprises sells data storage gear, computer servers for corporate technology departments. It is one of the promising areas for growth for the company.

HP expands market share

HP has increased its market share even though PC sales declined industry-wide since 2015. Before being appointed as CEO, Enrique Lores is engaged in operating the printer business since the split in the year 2015. He would relieve the current Chief Executive Officer – Dion Weisler.

HP makes money on ink cartridges

HP is a born leader in the industry. It sales the printers at a discount rate and charges premium on ink cartridges to realize profits. The company is different from those razors at a cheap rate and achieves profits on the blades. The new CEO would take charge with effective from November 1, 2019. Selling the printers at a discount and making money on ink cartridges helps the company to penetrate offices and homes.

Users are intelligent

Unlike in the past, users’ behavior is changed concerning printer purchases. They are smart and using tactics to save money. The customers buy printers at a cheap rate from HP and source ink cartridges at reduced prices from other vendors. This tactic is hurting the business of HP.

Now, the company is compelling the customers, who buy HP printers at reduced rates, to purchase ink cartridges only from HP. If the customers oppose this policy, they can procure printers at higher rates from other vendors.

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