[News] HP Taiwan Reportedly to Announce Layoffs amid Supply Chain Reshuffle

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According to Commercial Times, PC giant HP is rumored to start a new wave of organizational changes in Taiwan on October 15th. In addition to the potential layoffs of 20 to 30 local employees in the R&D department, other senior managers may be subject to the adjustment as well. In response to these rumors, HP Taiwan has not provided any comments.

Business Today indicated that the restructuring of HP Taiwan may be associated with the “Taiwan+1” policy, as supply chains gradually reshuffle to Southeast and South Asia to reduce geopolitcal risks.

Previously, Dell also reduced its workforce as part of a reorganization of its sales teams, as per a report from The Business Times. On the other hand, Dell has already begun producing some of its laptops in India to serve the local market.

Tech companies are now facilitating the relocation of supply chains to reduce the impact of geopolitical risks. A report from Nikkei indicated that HP has significantly reduced the Taiwan team’s influence in procurement decisions and has created related positions in Singapore as part of a major supply chain restructuring intended to mitigate geopolitical risks.

According to Commercial Times, HP announced its adjustment plans in 2022, stating that by the 2025 fiscal year, it would reduce its global workforce by 10%, impacting 4,000 to 6,000 employees. Now, rumors indicate that HP Taiwan’s R&D department is expected to see layoffs of 20 to 30 employees, and even senior executives, including vice presidents, may be affected.

HP reported revenue of USD 13.52 billion for the third quarter of fiscal year 2024 (ending July 31, 2024), marking a 2.4% annual increase, as noted by Commercial Times. This performance exceeded Wall Street’s forecast of USD 13.37 billion and ended eight consecutive quarters of decline, signaling a return to growth.

However, its quarterly net profit was only USD 640 million, reflecting an annual decrease of 16.4%. Additionally, HP has lowered its fiscal year 2024 outlook due to intense market competition. According to Commercial Times, the company now estimates that the full-year adjusted net profit per share will be between USD 3.35 and USD 3.45, lower than its previous forecast of USD 3.30 to USD 3.60.

Business Today mentioned that HP expects that AI PCs will help stimulate market recovery. The company aims to increase AI PC shipments to about 50% of its total PC shipments by 2027, hoping to boost the average selling price by 5 to 10%.

However, Business Today also pointed out that compared to Lenovo and Dell, HP has been relatively slow in deploying AI PCs. If HP hopes to rely on AI PCs for performance growth, it may need to navigate a challenging period ahead.

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• [News] Tech Giants’ Supply Chain Reshuffle: from China to Southeast and South Asia

(Photo credit: HP)