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HP Inc. (HPQ) - Get HP Inc. (HPQ) Report shares traded sharply lower Friday after the personal computer maker said slash nearly a fifth of its workforce in a cost-cutting effort it hopes will save around $1 billion over the next two years.

HP said it plans to eliminate between 7,000 and 9,000 positions from its global workforce of 55,000, while taking a fourth quarter charge of around $100 million to compensate for the costs. The group's simplified structure, however, will support free cash-flow generation of around $3 billion in the coming 2020 fiscal year, HP said, and it hopes to return around 75% of that to shareholders through dividends and buybacks. 

HP also published 2020 financial targets alongside the job cut plans, and sees adjusted 2020 earnings in the region of $2.22 to $2.32 per share, modestly higher than the $2.18 to $2.22 it forecast when it published its third quarter earnings on August 22. 

"We are taking bold and decisive actions as we embark on our next chapter," said incoming CEO Enrique Lores. "We see significant opportunities to create shareholder value and we will accomplish this by advancing our leadership, disrupting industries and aggressively transforming the way we work."

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"We will become an even more customer-focused and digitally enabled company, that will lead with innovation and execute with purpose," added Lores, who replaces the outgoing Dion Weisler, who stepped down from the Palo Alto, California-based group in August citing a family health issue, on November 1.

HP shares were marked 10.35% lower by mid-morning trading Friday to change hands at $16.5 each, a two-and-a-half year low and a move that would extend the stock's year-to-date decline to around 18.5% and lope around $2 billion from its market value.

"HP is undertaking a dramatic shift in printing, breaking with the supplies monetization strategy that has been status quo for decades," said Credit Suisse analyst Matthew Cabral, who cut his price target on the stock to by $3 to $18 per share with a market neutral rating. "We recognize the value in the change and agree that pulling profitability earlier into a unit's lifecycle likely leads to a more predictable income stream over time, more akin to the commercial A3 space," 

"That said, we see a potentially disruptive transition over the near-term, which brings risk of increased volatility for both EPS/FCF and, ultimately, the stock," he added.