HP announced its quarterly and annual earnings today, but despite slightly beating expectations, the PC maker says it will lay off up to 6,000 employees.

“We had a solid end to our fiscal year despite navigating a volatile macro-environment and softening demand in the second half,” HP president and CEO Enrique Lores said. “In Q4 we delivered on our non-[earnings] target, while also completing our three-year value creation plan and exceeding our key metrics. Looking forward, the new strategy we introduced this quarter 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 reported revenues of $14.8 billion in the quarter ending October 31, a decline of 11.2 percent year-over-year (YOY). The firm reported revenues of $63 billion in its fiscal year 2022, a decline of less than 1 percent YOY.

HP, the world’s second-biggest maker of PCs, said that PC sales declined 21 percent in the quarter, with portable sales down 26 percent and desktop PC sales down 3 percent. Revenue from consumer PC sales fell 25 percent while commercial PC revenues fell 6 percent. Its Personal Systems business unit reported revenues of $10.3 billion in the quarter, down 13 percent YOY.

HP’s other business, Printing, delivered $4.5 billion in revenues, down 7 percent, with total hardware sales down 3 percent.

Of course, the big news was that HP expects to lay off 4,000 to 6,000 employees during the current and next two fiscal years, or up to 12 percent of its workforce. “HP’s plan [will] drive significant structural cost savings through digital transformation, portfolio optimization, and operational efficiency,” it noted. “The company estimates that these actions will result in annualized gross run rate savings of at least $1.4 billion by the end of fiscal 2025.”

HP doesn’t expect the PC industry to bounce back anytime soon.

“We think that at this point it’s prudent not to assume that the market will turn during [HP’s fiscal] 2023,” Mr. Lores said in an interview.

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