HP CEO Enrique Alvarez announced plans to cut up to 2,000 jobs as part of a restructuring strategy aimed at saving $300 million annually, while also investing in growth areas like artificial intelligence and customer experience. He discussed the potential for reshoring manufacturing to the U.S. due to tariffs and highlighted the company’s focus on adapting to market trends, particularly in the PC segment and through branding efforts targeting younger audiences.
In a recent interview, HP CEO Enrique Alvarez discussed the company’s decision to cut up to 2,000 jobs as part of a restructuring plan aimed at saving $300 million annually. He emphasized that these cuts are strategic and part of a long-term vision that has been in place for nearly three years. While the specifics of where the job losses will occur have not been disclosed, Alvarez noted that the company is also investing in growth areas, indicating a balanced approach to workforce management.
Alvarez acknowledged that rising component costs and tariffs are contributing factors to the job cuts, but he framed the decision as part of a broader effort to enhance HP’s competitiveness. He highlighted the importance of investing in areas that promise long-term growth, such as artificial intelligence and customer experience, which are essential for positioning HP in the evolving landscape of work.
The conversation also touched on the growth of HP’s PC segment, with Alvarez stating that he expects PCs to represent over 25% of all shipments by the end of the year. He pointed out that the increasing demand for PCs is driven by their cost-effectiveness, speed, and security compared to cloud solutions. This growth is seen as a significant part of HP’s portfolio, reflecting the company’s adaptability to market trends.
Regarding manufacturing, Alvarez discussed the potential for moving production closer to the U.S. in response to tariffs and political pressures. He acknowledged the complexities and costs associated with reshoring manufacturing, particularly in terms of sourcing components. However, he noted that there are logistical benefits to local production, such as reduced costs and improved responsiveness to customer demand.
Finally, Alvarez highlighted HP’s branding efforts, particularly in appealing to younger audiences through gaming and sponsorships, such as their partnership with Ferrari. He also mentioned the recent acquisition of Humane, a generative AI company, which he believes will enhance HP’s product offerings by integrating AI technology. This acquisition aligns with HP’s strategy to leverage AI across its portfolio, positioning the company for future growth in a rapidly changing technological landscape.