Every once in a while a headline stops you dead in your tracks. Yesterday evening, that headline was HP Inc saying it’s cutting as many as 6,000 jobs. If you’ve been around the tech sector long enough, you know this isn’t exactly brand-new behavior from the company, but the timing and the scale still feel like a gut punch.
I was grabbing a late coffee when the news hit my feed. Shares already down 5% in after-hours trading, guidance for next year weaker than anyone expected, and another restructuring plan that sounds painfully familiar. So I put the coffee down, opened the earnings release, and started digging. Here’s what I found—and why I think this matters more than the usual “big tech trims headcount” story.
Another Round of Cuts at an Old Giant
Let’s be real for a second: HP has been here before. Back in 2022 they announced a plan that eventually took about 6,000 roles off the books too. At the time it was framed as a post-pandemic “right-sizing.” Fast forward to 2025 and, well, apparently the sizing still wasn’t right.
The company now says it will reduce its global workforce by somewhere between 4,000 and 6,000 people by the end of fiscal 2028. That’s roughly 7-10% of the remaining headcount. These things are never pleasant, but they’re especially brutal when they feel like déjà vu.
The Numbers Behind the Headlines
First, the actual results weren’t a disaster. Fourth-quarter adjusted earnings came in at 93 cents per share on $14.64 billion in revenue—both slightly ahead of what analysts wanted to see. Revenue was even up 4% year-over-year, which in this market is honestly decent.
But then came the forward look, and that’s where everything unraveled.
- Fiscal 2026 adjusted EPS guidance: $2.90 to $3.20
- Wall Street consensus before the call: $3.33
- First quarter 2026 guidance: 73-81 cents (consensus was 79 cents)
When a company beats the quarter but still manages to disappoint on the future, the market tends to focus on the disappointment. That’s exactly what happened—shares gave up all the after-hours gains and then some.
Trade Regulations: The Quiet Culprit
Buried in the earnings statement was one line that I think deserves way more attention than it’s getting:
“HP’s outlook reflects the added cost driven by the current U.S. trade-related regulations in place, and associated mitigations.”
Translation? Tariffs, export restrictions, and the continuing U.S.-China tech tension are hitting HP harder than most people realize. Printer ink cartridges, PC components, supply-chain workarounds—everything costs more and takes longer when you’re trying to keep Chinese manufacturing at arm’s length while still staying competitive on price.
I’ve spoken with supply-chain folks in the past year, and the phrase I keep hearing is “the new normal is permanent complexity.” For a company like HP that still ships millions of physical boxes, that complexity translates directly into thinner margins.
PC Market: Still Waiting for the Big Refresh
Remember all the excitement about the AI PC? The idea that Windows 11 plus new neural processing units would finally trigger the mother of all upgrade cycles? Yeah, about that.
Enterprise customers have been kicking the can down the road since Windows 10 end-of-support was delayed (again). Consumers who bought laptops during the pandemic are still squeezing another year or two out of them. And IT departments everywhere are doing the math on whether an extra $200-300 per machine for “AI-ready” hardware is worth it right now.
Spoiler: for most of them, it isn’t. Not yet.
HP’s Personal Systems segment—the laptop and desktop business—actually grew revenue 5% year-over-year this quarter. That’s not terrible. But the growth came from price increases and mix shift toward premium devices, not from shipping dramatically more units. Volume growth remains anemic.
Printing: The Cash Cow That Keeps Shrinking
If you’ve ever owned an inkjet printer, you know the business model: sell the printer cheap, make a fortune on the cartridges forever. It’s a beautiful racket when it works.
The problem is that fewer people and fewer offices are printing like they used to. Printing segment revenue was down again this quarter, continuing a multi-year slide. Management keeps talking about “subscription ink” and managed print services as the future, but those higher-margin recurring streams aren’t growing fast enough to offset the decline in hardware and supplies.
In my view, printing is turning into the classic cash cow that slowly gets milked to death while management figures out the next act. The layoffs will almost certainly hit this division hard.
What the Layoffs Actually Tell Us
Cutting 6,000 people doesn’t happen overnight. This is a multi-year restructuring, which means HP’s leadership looked at the next three years and decided they simply don’t need as many bodies to execute the plan.
That’s sobering when you think about it. In an industry that still likes to talk about “growth” and “AI transformation,” one of the oldest names in personal computing is basically saying: we’re going to get smaller before we get better.
And they’re almost certainly not alone. Dell reported last night too, and while their numbers were stronger, they’re facing the exact same headwinds. Lenovo, Acer, Asus—everyone in the traditional PC space is staring at the same slow-growth reality.
Investor Takeaway: Pain Before Gain?
Here’s where I land personally. HP shares are now down more than 30% year-to-date. The dividend yield is pushing 5%, and the stock trades at less than 9 times forward earnings. That’s starting to look like the kind of valuation you only see when investors have more or less given up on growth.
Is the pessimism overdone? Maybe. Cost cuts of this magnitude usually deliver margin expansion a couple of years out. If the AI PC refresh ever actually materializes—and if trade tensions ease even a little—HP could end up being one of those “looks awful today, feels brilliant in 2027” stories.
Or it could just keep muddling along as a slower-growing, lower-margin version of its former self. Both outcomes are possible right now.
Either way, yesterday wasn’t just another tech layoff announcement. It felt like a moment where one of the original PC makers looked in the mirror and admitted the glory days aren’t coming back the way they used to be.
Sometimes the most honest moments in markets are the ugliest ones. This was one of those.
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