The decision comes less than a year after the company removed a further 1,000 to 2,000 positions as part of an earlier cost-cutting programme.

Shares dropped 5.5% in extended trading shortly after the update, despite the firm reporting fourth-quarter revenue of $14.64 billion, slightly ahead of market expectations.

Chief executive Enrique Lores confirmed that teams working across product development, internal operations and customer support will be affected. During a media briefing, he said: “We expect this initiative will create $1 billion in gross run rate savings over three years.”

The company expects adjusted earnings per share for fiscal 2026 to sit between $2.90 and $3.20, below the consensus forecast of $3.33. The outlook for the first quarter is also muted, with guidance of 73 to 81 cents per share.

HP is seeing high interest in advanced PCs, which accounted for more than 30% of its shipments in the fourth quarter ending 31 October. Even so, the business is preparing for higher component costs. 

Analysts at Morgan Stanley have warned that increasing prices for dynamic random access memory and NAND chips are likely to squeeze margins for major computer makers, including Dell and Acer.

Lores said the financial impact would be felt from the second half of fiscal 2026, though current inventory levels should shield the business in the short term.

He added: “We are taking a prudent approach to our guide for the second half, while at the same time implementing aggressive actions like qualifying lower cost suppliers, reducing memory configurations and taking price actions.”

Across the technology sector, companies are cutting roles while reallocating resources into new product strategies.

Total shipments of desktops and notebooks rose to 65.3 million units.

Shipments of notebooks hit 51.6 million units, up 4% from 2022, while desktop shipments landed at 13.7 million units, declining 1%. For the full year 2023, PC shipments totaled 247 million units, marking a 13% drop compared to 2022.

The market is now poised for growth, with AI-capable PCs set to provide an additional boost during the ongoing refresh cycle and beyond.

“2023 was a challenging year for the PC industry, but companies have remained resilient and can now look forward to an improving landscape,” said Himani Mukka, Research Manager at Canalys. “The cautious optimism across key players in the market has been borne out by a stronger holiday season compared to last year and inventory corrections in the previous quarters have helped support renewed sell-in. As macroeconomic conditions continue to improve, companies and individuals that have delayed their purchasing for many quarters are now set to resume spending on PCs.”

“To capitalize on the demand uptick, the PC industry will now deliver meaningful innovation through on-device AI capabilities in PCs, with 2024 set to be a bumper year for such devices,” said Ishan Dutt, Principal Analyst at Canalys. “A slew of announcements from both OEMs and chipset vendors at CES will set the stage for more products to be brought to market later in the year. We expect one in five PCs shipped this year to be AI-capable, incorporating a dedicated chipset or block, such as an NPU, to run on-device AI workloads. Adoption will ramp up quickly thereafter, especially in the commercial sector, where the benefits of on-device AI related to productivity, security and cost management will become a key consideration for businesses.”

By 2027, Canalys forecasts that over 170 million AI-capable PCs will be shipped, with nearly 60% being deployed in commercial settings.

With AI PCs poised to take center stage in 2024, Canalys has released a complimentary special report to help understand the impact they will have. “Now and Next for AI-capable PCs” provides a comprehensive look into the dawn of AI in personal computing, including definitions and market projections alongside a deep dive into current trends, future opportunities and potential challenges in the AI PC market.

Lenovo sealed the top spot in the PC market rankings for Q4 2023, shipping 16.1 million units and posting 3% annual growth.

It was also the largest shipping vendor for the full year 2023, posting 59.1 million units. HP, securing the second position, recorded a 6% year-on-year growth in shipments in Q4.

Its overall annual shipments for 2023 amounted to 52.9 million units, a marginal 4% decrease from 2022. Dell retained its third position in both the Q4 2023 and full-year 2023 rankings, shipping 9.9 million units and 40 million units, respectively.

Apple secured the fourth position in Q4 2023 by shipping 6.6 million units globally, achieving 9% growth.

The vendor maintained fourth spot in the full-year standings as well, experiencing a 14% decline from 2022 with total units reaching 23 million units.

Acer secured the fifth position with a 12% year-over-year growth, shipping 4 million units in Q4 2023, but Asus occupied the fifth spot in the full-year rankings for 2023, totaling 16 million units and experiencing a 21% annual decline compared to 2022.

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