Core Points - HP plans to cut between 4,000 and 6,000 employees by the end of 2028, representing up to 10% of its workforce, as part of its initiative to adopt artificial intelligence [1][2] - The job cuts are aimed at generating $1 billion in gross cost savings by the end of fiscal 2028, with projected restructuring costs of $650 million, including $250 million expected in fiscal 2026 [2] - Following the announcement, HP's shares fell 5.5% in extended trading [1] Company Strategy - CEO Enrique Lores stated that the layoffs are not solely about cost reduction but are part of a broader transformation of operations [5] - HP's strategy focuses on enhancing customer satisfaction, product innovation, and productivity through AI adoption while achieving cost savings via workforce reductions and program consolidations [7] - The company has been piloting AI applications for two years to redesign processes, which Lores believes can significantly impact operations [9] Financial Performance - HP reported fiscal 2025 results showing $55.3 billion in annual revenue, a 3.2% increase year-over-year, and $2.9 billion in free cash flow, despite a 5.7% decline in GAAP earnings per share [12]

Core Viewpoint - HP Inc. announced a significant reduction in workforce, projecting layoffs of 4,000 to 6,000 employees, alongside a lower-than-expected earnings forecast for the upcoming fiscal year, resulting in a 5% drop in share price during extended trading [1][2]. Financial Performance - For the fourth quarter, HP reported adjusted earnings per share of 93 cents on revenue of $14.64 billion, marking a 4% year-over-year increase. This performance slightly exceeded analyst expectations of 92 cents per share and $14.48 billion in revenue [2]. - For the first quarter of fiscal 2026, HP anticipates adjusted net earnings per share between 73 cents and 81 cents, which is below the LSEG consensus of 79 cents. For the entire fiscal 2026, the company projects adjusted earnings per share of $2.90 to $3.20, also falling short of the consensus estimate of $3.33 [3]. Market Context - The layoffs at HP follow a similar round of job cuts in 2022 and are part of a broader trend among technology companies facing challenges due to rising prices and interest rates affecting U.S. consumers [2]. - The company's outlook is influenced by increased costs associated with current U.S. trade-related regulations and necessary mitigations [3].