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HP cuts up to 9,000 jobs in new CEO's rescheduling plan



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HP Inc.

CEO

Enrique Lores

goes fast to push changes to the hardware manufacturer with plans to shrink the company's ranks by as much as 16% in a conversion plan that also aims to revive lagging printer sales.

HP on Thursday said it could eliminate 7,000 to 9,000 jobs from roughly 55,000 workers over the next three years. The cuts, when completed, would provide an annual savings of around $ 1 billion, the company said at its annual securities analyst meeting. HP is nearing the end of a three-year layoff plan that can eliminate up to 5,000 jobs.

HP has been under pressure in recent quarters from a decline in the print supply business that was once the biggest money maker. To help reinvigorate growth, it plans to offer new ways to sell its products.

Before the printing business had problems, HP had experienced stronger growth than expected since

Hewlett-Packard Co.

in 201

5, the company that Bill Hewlett and Dave Packard shared started in their garage in Palo Alto, California, in 1939. The other business,

Hewlett Packard Enterprise Co.

, focuses on selling data servers, data storage equipment and other services to business technology departments and has been widely regarded as the company with more promising growth prospects.

Despite a decline in PC sales worldwide since 2015, HP has expanded its market share, although overall shipments also declined, according to

Gartner Inc.

Mr. Lores, who has been running the HP printer business since sharing, was named CEO in August

Dion Weisler,

who said he left the company for health reasons.

HP sold historical printers at a discount, and then made money from ink cartridges, not unlike companies selling discount razors and making blades. "That model made sense as the goal was to penetrate more consumer housing and more offices," said Mr. Lores, who is scheduled to take over as CEO on November 1.

But users' habits have changed. Customers have migrated to buy their ink cartridges from other, cheaper suppliers and have become more careful in which documents they choose to print, and damage HP's business.

So HP is changing the sales model. It will still offer customers the opportunity to buy their discounted printers, but will then lock them to buy HP ink. Unlike smartphones, it is not unlike smartphones for a particular service provider. Customers can also choose to buy printers at a higher price that will allow them to use third-party ink cartridges, Lores said.

HP, which is set to report its financial results for the fourth quarter of next month, said it would incur an initial cost of $ 100 million in the period related to the new restructuring plan.

The cuts, company officials said Thursday, will allow them to redirect additional money to areas of growth and shareholder return through a combination of higher dividend payouts and share repurchases.

But in the short term, the restructuring will weigh down the company's bottom line. On Thursday, company officials said they expect to deliver $ 1.98 to $ 2.10 per share for the year ending October 31, 2020, below the $ 2.18 analysts surveyed by FactSet, forecasts.

costs and other items, company officials estimated a profit of $ 2.22 to $ 2.32 per share, compared to analysts' projected $ 2.24 per share.

Write to Maria Armental at maria.armental@wsj.com

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