HP reports Q4 revenue down 11.2% YoY to $14.8B and Personal Systems revenue down 13% YoY to $10.3B, and forecasts a 10% drop in PC sales in FY 2023
HP Inc. said it will eliminate as many as 6,000 jobs over the next three years amid declining demand for personal computers that has cut into profits.
Context & Ripple Effects
This report marks the start of the post-pandemic PC unwind at HP Inc.: Personal Systems falls 13% YoY to $10.3B, echoing the last pre-COVID slump when an 11% revenue miss in 2016 came with personal systems down 10%. The difference this time is that HP is pairing the downturn with structural action — up to 6,000 job cuts over three years — rather than just cutting guidance.
The guidance proved conservative: the following year brought Q1 revenue down 19% and a Q2 drop of 22%, with Personal Systems falling as much as 29%, before declines narrowed through late 2023 and revenue returned to growth by Q4 2025.
First-order effects
- Up to 6,000 HP employees face elimination over three years as management converts a demand shock into a permanent cost-base reduction.
- HP's own forecast of a 10% PC sales drop in FY 2023 resets expectations for Personal Systems, its largest segment at $10.3B in quarterly revenue.
Second-order effects
- With PCs shrinking faster than Printing (down only single digits in the quarters that followed), HP's profit mix tilts toward the printer business, raising the stakes on supplies and services revenue per installed device.
- A 10% unit-demand guide flows downstream to HP's component suppliers and channel partners, who now plan inventories against a smaller installed base rather than pandemic-era shipment levels.
Third-order effects
- Restructuring is becoming HP's standing response to PC cycles rather than a one-off: even after revenue recovered to $14.6B by late 2025, HP announced plans to cut another 4,000 to 6,000 jobs through FY 2028, suggesting each downturn ratchets the cost base permanently lower.
- If the pattern holds, PC hardware consolidates into a scale-and-cost game where vendors compete on operating leverage across cycles instead of betting on volume growth returning.
The trend: PC makers are treating post-pandemic demand erosion as a trigger for repeated structural downsizing, not a temporary dip to ride out.