HP is cutting up to 2,000 jobs and scaling back its dependence on Chinese manufacturing for the North American market. This decision follows mounting US tariffs and rising component costs as the company reshapes its supply chain to stay competitive.
Financial performance and market trends
HP reported US$13.5 billion in revenue for the first quarter of fiscal year 2025, a 2.4% increase compared to the same period a year ago. According to Statista and Entrepreneur, its Personal Systems division, which includes PCs, generated US$9.2 billion, up 4.7%. While commercial PC sales rose 10%, consumer PC revenue dropped 7%, with unit shipments declining 11%.
HP's net profit dropped 9.16% compared to the same period a year ago to US$565 million, weighed down by higher component costs and US tariffs on Chinese imports, according to ICsmart. The company forecasts second-quarter adjusted earnings per share between US$0.75 and US$0.85, in line with analyst expectations.
Regional revenue distribution stood at 41% from the Americas, 35% from Europe, the Middle East, and Africa (EMEA), and 24% from Asia-Pacific and Japan (APJ).
Supply chain shifts amid tariff pressures
HP is restructuring its supply chain to reduce exposure to US tariffs on Chinese imports. CEO Enrique Lores told Bloomberg that by October 2025, under 10% of HP's North American sales will be sourced from China.
China remains a key manufacturing hub for non-North American markets, but HP is expanding production in Thailand to mitigate geopolitical risks.
HP's move aligns with an industry-wide effort to shift production away from China. Nikkei Asia previously reported that HP targets manufacturing 70% of its laptops outside China within two to three years.
Workforce reduction and cost-cutting initiative
HP plans to cut 1,000 to 2,000 jobs by October 2025 as part of its "Future Now" restructuring initiative, which was launched in November 2022. The layoffs will affect multiple departments.
An SEC filing cited by Entrepreneur shows HP's original plan to cut 7,000 jobs has now expanded to 9,000, with projected savings of US$1.9 billion. The company expects to save US$300 million annually from the restructuring.
HP describes the layoffs as part of a strategic shift, reallocating resources to AI and customer experience investments. Lores told Bloomberg the company is also exploring US manufacturing, beyond assembly, to establish domestic supply chains.
Future outlook
Trade policies and geopolitical tensions are reshaping HP's supply chain strategy. In response to rising US tariffs and operating costs, the company is ramping up production outside China and optimizing operations.
According to ICsmart, HP's restructuring efforts are designed to strengthen its position in the global PC and printing market.
Article edited by Jerry Chen
