HP estimates the plan will result in annual gross run rate savings of about $1 billion by the end of fiscal 2022, it added. The company had about 55,000 workforce globally as of Oct. 31, according to a filing with the U.S. Securities and Exchange Commission. That would mean as many as 16% targeted in the cuts, Reuters calculation revealed.

 

Relating to the restructuring, HP said it expects to incur an overall charge of over $1 billion, of which $100 million will be realized when it reports its fourth-quarter earnings. “We are taking bold and decisive actions as we embark on our next chapter,” said Enrique Lores, the company’s incoming chief executive officer.

 

“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.”

 

Lores will take over the CEO position on Nov. 1 from Dion Weisler. Palo Alto, California-based HP also said its board on Sept. 30 endorsed an additional $5 billion in share buybacks. 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 desires 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 range of $2.18 to $2.22, the company said when reporting its third-quarter earnings. HP’s shares have fallen about 10% this year up to Thursday’s close.

 

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