HP Unveils New Plan Targets Total Savings of at least $1 Billion by 2022

Hewlett-Packard Co. on Thursday unveiled a plan to save at least $1 billion in total spending by 2022 and cut executives’ basic salaries by 25 percent as the software maker seeks to weather the new virus crisis, Reuters reported. The company’s shares have fallen about 35 per cent so far this year and nearly 6 per cent in extended trading after second-quarter revenue and profit fell short of expectations and the impact of the global blockade since February.

HP Unveils New Plan Targets Total Savings of at least $1 Billion by 2022

Antonio Neri, the chief executive, said on a conference call after the results that he was concerned about cautious consumer and supply constraints.

HP said its base pay for executives at the CEO and executive vice-president levels will be reduced by 25 percent for the remainder of the fiscal year, which begins July 1. The board also agreed to cut the $100,000-a-year cash retention payment the directors received during the same period by 25 per cent. HP will now focus on investing and realigning its workforce to align with its supply chain and real estate strategy and resize its business.

“My expectation is that at least 50 percent of our employees will never return to the office,” Neri said by phone. “

HP cut its 2020 forecast in April, earning s22 cents per share, below analysts’ average estimate of 29 cents, according to Refinitiv’s IBES. In addition, the company’s revenue of $6.01 billion fell short of its $6.29 billion forecast.