Computer and printer maker HP plans to lay off 10% of its 61,000 employees worldwide over the next three years. They will do so because of the reported decline in demand for personal computers (PCs) impacting the company’s earnings, according to Bloomberg. The company’s earnings report expected a 10% drop in PC sales for the fiscal year, according to Chief Executive Officer Enrique Lores. We expect a difficult market environment,” he said.

At first, HP’s decline in personal computer demand began only in low-end consumer products. But Lores said demand has worsened since companies began to cut workforces and curb investments in technology.

According to technology research and consulting firm Gartner, global computer shipments in the third quarter of 2022 totaled 68 million units, down 19.5% from the third quarter of 2021. This is the sharpest market decline since the company began tracking the personal computer market in the mid-1990s and the fourth consecutive quarter of annual declines. In the third quarter of 2021, HP shipped 17,622 devices. However, in the same period of 2022, this number decreased to 12,706.

Computer shipments rose 55% in 2021 as the COVID-19 pandemic prompted people to purchase computers to work from home or go to school. However, the sharp decline in this figure in the first quarter of 2022 signaled the end of the pandemic boom in PC sales.

HP will spend approximately $1 billion on restructuring costs, approximately 60% of which will be in fiscal year 2023. By the end of fiscal 2025, the company plans to save up to $1.4 billion annually. As the PC market continues to decline, HP will look to invest in new businesses such as subscription services. Lores said the company will also explore plans for other products, such as printer paper.