Inkjet Wholesale News aims to provide updates on the latest significant occurrences in the field of printing. Whether it’s the launch of a new technology or volatility of market prices, we’ll be here to give you the lowdown on what happened, when it happened, and what it means!
HP Inc. Job Cuts Fast-tracked; To Be Completed in Current Fiscal
Before the much talked and argued about HP split, Meg Whitman announced massive HP layoffs revolving around HP Enterprise. We reported on this layoff in September last year citing that the jobs being cut could reach numbers as high as 80,000 to 85,000. Whitman, at the time, was the CEO of the erstwhile HP and was going to become the CEO of HP Enterprise. Therefore, when she announced job cuts, most people rightly assumed that it was for the new entity HP Enterprise.
People in the Dion Weisler camp, meanwhile, used these job layoff announcements from Whitman as proof that his management is going to be more beneficial and wholesome in nature. However, it seems that the woes that plagued the parent organisation, HP, will not leave either of its progenies untouched.
Around the same time that Whitman had announced the removal of up to 85,000 HP employees, it was also revealed that around 3,000 jobs will be cut from the company’s printing division. The latter were directly associated with the wing that Weisler was expected to lead i.e. HP Inc. and were supposed to be spread across three years.
Now, further information has entered the mainstream about these job cuts. These job cuts were supposed to be phased by HP Inc. over a period of three years. However, the recent announcement from the Original Equipment Manufacturer (OEM) specifies that all the jobs that were supposed to be removed would be removed within the current fiscal.
The reasoning given by the new company for the acceleration of the HP Inc. job cuts is the same as what HP Enterprise had given, namely difficult markets. In the case of HP Inc. job cuts, the segments that are having an impact on the OEM are personal computers and printers.
Both these markets hold the key to HP Inc.’s bottom line. In fact, referring to these job cuts, Weisler stated, “We’re operating in markets that are challenged”. He further went on to say that while in some markets, they see an opportunity to “outpace” their competitors, in others, they see a chance to reduce their costs.
While the acceleration of HP Inc. job cuts may make the OEM seem to be in trouble, the reality is that it is on track when measured against its own predictions for the third quarter of the current fiscal. For instance, the profits forecasted by the company in Q3, 2016 matched the estimates it had given earlier for the period.
The idea behind the HP split from the perspective of HP Inc. and Dion Weisler was that the latter would get more control to manage the former. Supposedly, the HP split gave Weisler more control and flexibility over the direction of the company. The agenda, following the split, was for Weisler to stabilise profits before expanding the company’s customer base into new areas.
Since expanding customer base with innovation is a long term strategy and stabilising revenues and profits is the short term strategy, it can be said that HP Inc. is on course to achieving its short term strategy. HP Inc. job cuts are a part of this short term strategic effort because profits can only be stabilised when the costs in the company operations are reduced. Removing 3,000 jobs from the operational chain will end up saving the OEM considerable amount of money.
HP Inc.’s personal systems division which manufactures computers and laptops showed a drop of 13 percent while the revenues of its printer manufacturing division fell by 17 percent. Coming back to the kind of environment that HP Inc. has to navigate, it is important to note that it isn’t only HP Inc. that is suffering. HP Inc. job cuts are a result of lowering demand and profit margins in a market that was already highly competitive.
For instance, Vaio Corp. which was created out of Sony Corp. is currently on track to complete a merger with two competitors in the same field. Similarly, Dell Inc. is diversifying its product portfolio by adding storage products through the acquisition of EMC Corp.
Both these competitors of HP Inc. have taken a different tack in dealing with the demand problems in the market. Similar trends of dropping demand have been noticed in the printer and printing consumables markets.
Now, it’s Samsung Criticising Printing Consumables Aftermarket Suppliers
Consumers are becoming wiser about the marketing techniques that OEMs use with their printers. They’re well aware of the razor blade selling technique. This increased awareness in their customer base has resulted in all the OEMs suffering as users are choosing aftermarket products over genuine ones. Effectively, the revenues and profit margins of the printer and printing consumables industry are declining significantly. As explained above, most OEMs are scrambling to find newer ways of coping with this decline.
However, while these OEMs are looking to innovate and escape from the upcoming market shrinkage from one side, on the other side, they’re trying slowdown the decline. One of the ways through which OEMs are trying to slow down the pace of this decline is by trying to convince users that genuine consumables provide better quality than aftermarket consumables.
The latest volley of shots in this battle has been launched by Samsung. On its blog, Samsung Printing Solutions, the OEM decided to trash any and all alternatives that printer users may have to its genuine products. In a transparent effort to convince users that its products are the best, the OEM ended up clubbing refilled cartridges, refurbished cartridges, and aftermarket produced generic cartridges in the same category as counterfeit cartridges.
Samsung’s argument mainly focused around its own research results. The company cited possible device failures and reduction in print quality as reasons why users should only use “genuine Samsung cartridges”.
Additionally, probably because the main reason why users opt for aftermarket solutions is cost, Samsung also claimed that “genuine Samsung cartridges” have no “hidden costs” associated with them as opposed to “non-genuine cartridges”. The “hidden costs” the company referred to were mainly related to malfunctioning aftermarket solutions. Apparently, Samsung’s genuine cartridges are 30 percent cheaper than aftermarket alternatives simply on the basis of malfunctions.
Needless to say, if you’ve been using Inkjet Wholesale’s generic cartridges, you’ll have plenty to disagree with Samsung about. And, if you’re reading our blog for the first time, we suggest you head over to our website to checkout some reviews from our regular customers.
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