HP Inc. (HPQ) is doubling down on artificial intelligence — and betting it will replace thousands of jobs in the process.
“There are many things that today we have to do using people … that in the future AI will do better and will do faster,” CEO Enrique Lores told Yahoo Finance (video above).
It’s not just an HP issue, he added, but an “industrywide” shift companies must embrace to stay competitive.
That transformation is reshaping HP. The company on Tuesday unveiled a sweeping AI initiative tied to new restructuring efforts. HP expects to eliminate 4,000 to 6,000 jobs globally and generate $1 billion in annualized savings by fiscal 2028.
“We’re moving from pilots to specific initiatives across multiple areas,” Lores said, noting AI is accelerating product development, improving customer satisfaction, and boosting internal productivity.
Lores emphasized that HP’s AI approach goes far beyond chatbots, with efforts that include AI agents that automate processes, AI-assisted software development, and systems that accelerate operations.
The through line: Tasks once handled manually are increasingly being handed over to AI systems.
HP expects to spend roughly $650 million on restructuring, including about $250 million in fiscal 2026.
But the ambitious AI plan did not distract from what was ultimately a mixed quarter.
Fourth quarter revenue rose 4.2% to $14.6 billion, slightly below the $14.8 billion analysts expected, according to Bloomberg data. Adjusted EPS fell 3% to $0.93, in line with estimates.
The stock was up more than 2% in Tuesday trading before falling as much as 5.5% in after-hours action after its earnings release. Shares remain down roughly 17% over the past 12 months, compared with a 15% gain for the S&P 500 (^GSPC).
Personal Systems — HP’s PC business — was a bright spot, with revenue up 8% to $10.4 billion, helped by Windows 10’s end-of-life upgrade cycle. Units rose 7%.
The printing segment continued to slide. Revenue fell 4% to $4.3 billion; supplies dropped 4% and hardware units fell 12%.
JPMorgan’s Samik Chatterjee downgraded the stock to Neutral, arguing HP is leaving the “favorable” part of the PC cycle and entering a “relatively tougher environment.”
He expects PC shipments to rise 6.6% in 2025 but fall 2.2% in 2026 as the Windows 10 replacement boom fades.
Rising DRAM and NAND costs could deepen the hit. Bank of America’s Wamsi Mohan estimates HP faces a 120-basis-point gross margin hit, a 103-basis-point operating margin hit, and $0.46 EPS drag next year from memory inflation alone.
