HP to Cut Jobs Amid Financial Growth and Tariff Pressures

HP to Cut Jobs Amid Financial Growth and Tariff Pressures

HP Inc. has reported a solid start to fiscal 2025, with first-quarter net revenue reaching $13.5 billion, marking a 2.4% increase year over year. Despite this growth, the company faces ongoing challenges, including the impact of rising U.S. tariffs on Chinese imports.

Overall Financial Results

In the first quarter, HP achieved revenue growth for the third consecutive quarter, driven by a strong commercial segment in Personal Systems and increased momentum in AI-powered PCs. While revenue increased, first-quarter GAAP diluted net earnings per share (EPS) declined slightly to $0.59 from $0.62 in the previous year, with non-GAAP diluted net EPS at $0.74, down from $0.81.

The Printing segment faced a 2% decline in revenue, totaling $4.3 billion, with mixed results—consumer printing revenue rose by 5%, but commercial printing fell by 7%. The Personal Systems segment generated $9.2 billion in revenue, reflecting a 5% increase, primarily due to a 10% rise in Commercial Personal Systems sales. However, consumer sales declined by 7%, with overall unit shipments down by 1%.

HP’s financial outlook remains stable, with projected GAAP diluted net EPS for the second quarter ranging from $0.62 to $0.72. The company expects to generate free cash flow between $3.2 billion and $3.6 billion for the fiscal year, maintaining its commitment to shareholder returns through dividends and stock repurchases.

Workforce Reductions and Restructuring

As part of its cost-saving measures, HP has announced plans to lay off up to 2,000 employees. This move follows previous workforce reductions, bringing the total number of job cuts to nearly 9,000 under the company’s ongoing restructuring initiatives. HP cites multiple factors contributing to these decisions, including the rising costs associated with tariffs on Chinese imports, which have impacted profit margins. The layoffs are part of a broader effort to streamline operations and reduce annual costs by approximately $300 million.

Despite the workforce reductions, HP positions these measures as part of a long-term strategy to enhance operational efficiency and sustain growth in an evolving market. CEO Enrique Lores emphasized the importance of adapting to market conditions while investing in key areas, such as AI-driven computing. While cost-cutting remains a priority, HP aims to balance these efforts with innovation and strategic investments to maintain its competitive edge in the technology sector.