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HP CEO sees major PC refresh cycle as people 'continue to work in hybrid way'

DAVOS, Switzerland — That $500 computer and $35 webcam hurriedly purchased during the start of the COVID-19 pandemic may need to be refreshed soon given the intervening years of heavy use, HP Inc. CEO Enrique Lores contended.

"I do," Lores told Yahoo Finance Live (video above) at the World Economic Forum (WEF) this week when asked if he believes a hardware refresh cycle is poised to ensue within the next couple of years.

"All of them [PCs and webcams] will be replaced," Lores added. "We really think that people are going to continue to work in a hybrid way, which means sometimes working from home and sometimes working from the office, doing different things in different locations. And clearly, this is a big opportunity for us."

Naturally, that would ignite a sales and profit opportunity for HP (HPQ) and rival Dell (DELL) — both of which raked in the cash at the height of the pandemic but are currently seeing a post-COVID demand slowdown.

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And right now, PC makers could use any opportunity they can get.

Global shipments of PCs crashed 28.1% in the fourth quarter of 2022, according to IDC. The research outfit estimates global PC shipments will fall 5.6% in 2023.

HP saw fiscal fourth-quarter sales fall 11.2% from a year ago, pushed lower by a 26% decline in the number of notebook computer units sold. Meanwhile, desktop unit sales fell by 3% in the quarter and consumer printer unit sales fell by 4% while commercial sales gained by 5%.

In this photo taken Tuesday, May 23, 2017 employees assist a customer with a computer at Best Buy in Cary, N.C. (AP Photo/Gerry Broome)
In this photo taken Tuesday, May 23, 2017 employees assist a customer with a computer at Best Buy in Cary, N.C. (AP Photo/Gerry Broome) (ASSOCIATED PRESS)

To ease the pressure on the bottom line, HP recently revealed a new $1.4 billion cost-cutting plan that will see it shed 4,000 to 6,000 employees by fiscal year 2025. That's about 12% of HP's workforce.

"We have identified five key growth areas," Lores told Yahoo Finance Live about the cost cuts. "What we have said is some of the savings will go to the bottom line. Some will also be used to continue to accelerate the growth in those areas because this is where we see the future of the company."

More Yahoo Finance coverage of Davos 2023:

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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