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https://www.marketwatch.com/story/hp-to-slash-7000-to-9000-jobs-over-three-years-as-part-of-major-restructuring-2019-10-03

HP Inc. on Thursday announced a major restructuring that will eliminate 7,000 to 9,000 jobs over the next three years as part of a series of moves to transform the computing giant into a software and services powerhouse.

"This is one of the toughest decisions we had to make, but it is absolutely necessary for HP's future," incoming Chief Executive Enrique Lores told MarketWatch in a conference call with a handful of industry analysts. Lores and Chief Financial Officer Steve Fieler laid out a financial road map for the company's fiscal year 2020 several hours before HP's analyst day was to start.

The boldest move is a job reduction of up to 13% to 16% of HP's 55,000 employees worldwide to save $1 billion in operation costs. Those savings, in turn, would be invested in software and services as HP attempts to "reinvent business,". Those savings, in turn, would be invested in software and services as HP attempts to "reinvent business," Lores said.

HP shares slid 3% at $17.83 in after-hours trading Thursday.

Additional reporting at ZDNet.com.

Affected employees will be let go through a combination of employee exits and voluntary early retirement, HP said.

To be completed by fiscal 2022, the restructure, according to HP, will cost the business a total of approximately $1 billion, with approximately $100 million in 4Q19, $500 million in fiscal 2020, and the rest to be split between fiscal 2021 and 2022.

The company also estimates that the restructure will result in annualised gross run rate savings of about $1 billion by the end of fiscal 2022.

The announcement comes as part of HP's outlook for fiscal 2020, which estimates that its generally accepted accounting principles (GAAP) diluted net Earnings Per Share (EPS) will be in the range of $1.98 to $2.10. It also estimates that non-GAAP diluted net EPS will be in the range of $2.22 to $2.32.

Based on the current environment, HP said it anticipates generating free cash flow of at least $3 billion for fiscal 2020.

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