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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Shairs of HP are down this morning after giving a

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Speaker 2: profit outlook that fell short of market expectations. The computer

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Speaker 2: maker citing the impact of rising component costs and tariffs

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Speaker 2: on goods from China. Joining us now is Enrique Lores

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Speaker 2: HP CEO, as well as here on the desk with

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Speaker 2: me co host of Bloomberg Technology Caroline Hyde. Enrique, let

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Speaker 2: me first ask you about these job cuts. You're gonna

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Speaker 2: cut two thousand workers or as many as two thousand

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Speaker 2: workers to save three hundred million dollars a year, must

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Speaker 2: be partially in response to these tariffs. Right, where are

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Speaker 2: those jobs going to be lost?

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Speaker 3: Well, first of all, thank you, thank you for having

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Speaker 3: me here. This is part of the restructuring program that

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Speaker 3: we started with the company almost three years ago, and

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Speaker 3: we have been very selective and very strategical. Where to

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Speaker 3: make these cuts is not only cats. We are more

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Speaker 3: doing rebalancing of because at the same time we're investing

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Speaker 3: in other areas. But that's really a part of our

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Speaker 3: long term plan that we have put in place, and

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Speaker 3: really we are now about to finish that at the

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Speaker 3: end of the year.

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Speaker 2: But where where are those jobs? Are American job's going

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Speaker 2: to be lost here in Regain.

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Speaker 3: I think it's all over the company. We have been

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Speaker 3: identifying areas where we needed to be more precise, and

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Speaker 3: we haven't shared externally the specifics or where this will happen,

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Speaker 3: but I can tell you is one of the decisions

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Speaker 3: we make with more care because we know that relevance

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Speaker 3: this has for our employees.

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Speaker 1: Okay, we know that you were looking at stripping out costs.

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Speaker 1: When it comes to that stripping out of costs, is

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Speaker 1: it as Mattin implies in reaction to also the component

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Speaker 1: costs that are going up the China tariffs as you speak,

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Speaker 1: as we've been speaking about on the Nning School, for example.

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Speaker 3: I think it's a combination of multiple factors. When we

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Speaker 3: look at the short term, clearly component costs and tariffs

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Speaker 3: are going to be having an increase. But also this

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Speaker 3: is part of the effort to make the company more

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Speaker 3: competitive in the long term and to be able to

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Speaker 3: invest in the areas where we see long term growth

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Speaker 3: we have. We are positioning the company to lead in

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Speaker 3: what we call the future of work, and this requires

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Speaker 3: incremental investments in areas like AI, in areas to customer experience,

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Speaker 3: and this has been driving these savings allow us to

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Speaker 3: also invest in the areas of growth for the future.

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Speaker 1: But how quickly is the AIPC, for example, really coming

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Speaker 1: on tap and driving demand. I know there's good growth

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Speaker 1: twenty five percent, but it's from a standing start. So ultimately,

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Speaker 1: when do you think the percentage of aipcs will match

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Speaker 1: what's already being shifted to the market.

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Speaker 3: For example, our current expectation is that by the end

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Speaker 3: of this year, aipcs will represent more than twenty five

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Speaker 3: percent of all PC shipments. So it's really growing very fast.

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Speaker 3: As you said, market wise, quarter over quarter we saw

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Speaker 3: growth of twenty five percent, So they are starting to

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Speaker 3: be a relevant part of our portfolio and a relevant

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Speaker 3: part of the mix. And this is because of the

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Speaker 3: incremental value that they bring. When customers use that, they

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Speaker 3: can experience AI at the edge, which means it is

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Speaker 3: lower cost, it is cheaper, it is faster than doing

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Speaker 3: it in the cloud, and it's also more secure because

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Speaker 3: you can use your local data, you don't need to

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Speaker 3: bring the data to the cloud, and you can manage

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Speaker 3: everything locally.

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Speaker 2: So part of the reason that the Trump administration is

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Speaker 2: putting on these tariffs is to bring production back to

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Speaker 2: the US. And obviously there's not a lot of computer

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Speaker 2: final assembly in this country or our printers for that matter.

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Speaker 2: Are you reacting at all to this by moving production

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Speaker 2: to the US.

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Speaker 3: What we have learned during the last three years is

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Speaker 3: that we always need to be looking at different scenarios

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Speaker 3: of how to evolve our supply chain, and this is

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Speaker 3: what we have done in the last two years. Moving

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Speaker 3: manufacturing into the E is one of the scenarios that

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Speaker 3: we are contemplating. We haven't made any decisions yet.

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Speaker 1: How expensive would that make components? Though, Enrique, are we

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Speaker 1: going to see pressure on component prices and your ultimate

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Speaker 1: bottom line continue if you're having to shift the manufacturer

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Speaker 1: closer to the US.

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Speaker 3: I think one of the challenges of bringing manufacturing back

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Speaker 3: to the US is what you just said is not

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Speaker 3: only the assembly that we will be doing. Is what

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Speaker 3: will it take to bring all the different components, all

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Speaker 3: the different suppliers that we have and have the manufacturer here.

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Speaker 3: And this is going to be a much longer process,

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Speaker 3: and it's part of the evaluation that we are doing.

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Speaker 1: Is it much incentive for you to do so? Other

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Speaker 1: than political pressure? Are getting enough carrot rather than just

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Speaker 1: stick coming from the federal government.

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Speaker 3: I think there are different reasons to make our subbly

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Speaker 3: chain food prim more flexible, and this is what we

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Speaker 3: have been doing over the last years. One is requirements

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Speaker 3: from different governments, and different governments have put in place

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Speaker 3: different requirements. Also, another incentive is logistics cost. It will

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Speaker 3: be of course cheaper to produce products closer to where

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Speaker 3: customers are and also provides more flexibility and in terms

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Speaker 3: of time for response to customer demand. So there are

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Speaker 3: some benefits of building products locally and this is one

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Speaker 3: of the reasons that where we have gone from a

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Speaker 3: very centralized model that we had a few years ago

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Speaker 3: to a more decentralized model that we have now.

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Speaker 2: Riquet, how is the brand progressing? You know, somebody of

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Speaker 2: my age knows the name Hewlett Packard, but not the

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Speaker 2: simple two letter acronym HP. You have obviously a real

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Speaker 2: opportunity to make a change there as the kids start

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Speaker 2: using computers more for AI or as AI starts to

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Speaker 2: drive sales. So how is pushing this brand in your

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Speaker 2: growth as simply HP progressing?

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Speaker 3: We think that the brand is one of the key

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Speaker 3: acts that we have in the company and during the

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Speaker 3: last twenty four months, we have significantly increased the investment

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Speaker 3: that we do in the brand and we for example

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Speaker 3: have signed some global sponsorships with keysport teams to be

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Speaker 3: able to really make the brand more visible. And this,

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Speaker 3: for example why we sign an agreement with Ferrari to

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Speaker 3: be the title sponsor of Ferrari last year. Additionally, to

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Speaker 3: bring kids. This is one of the to the brand

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Speaker 3: and to the company. This is one of the areas

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Speaker 3: where our gaming business is relevant. We are one of

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Speaker 3: the key gaming suppliers in the world, and by having

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Speaker 3: a strong presence in gaming, we can attract kids and

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Speaker 3: young people to the brand.

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Speaker 1: You're talking math's language when you bring up Ferrari and

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Speaker 1: video games. I'm video caase that that matter, Enriquey. Going

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Speaker 1: into the weeds there a bit on the tech side

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Speaker 1: of things. You made a really interesting purchase recently of Humane.

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Speaker 1: It was a much hyped Generator AI hardware and software

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Speaker 1: company ex Apple founders. They sold to you the talent,

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Speaker 1: the tech, but not actually the hardware pen I'm interested

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Speaker 1: in You're not thinking about Generative AIS a hardware piece

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Speaker 1: in that respect, how does it help your business?

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Speaker 3: We think that the acquisition of Humane has been a

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Speaker 3: very smart mood for us. We are getting a very

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Speaker 3: talented team and we are getting key software technology that

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Speaker 3: we can integrate in the rest of the portfolio. One

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Speaker 3: of the key strategies of the company is really about

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Speaker 3: integrating AI into all of our products so customers can

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Speaker 3: experience AI ad ed and Humane has key technologies that

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Speaker 3: will allow us to accelerate that development. So it's really

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Speaker 3: a big part of where we are taking the company

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Speaker 3: and we're very pleased having been able to do that.

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Speaker 2: Enrique really appreciate the time today. And Ricky Loris there

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Speaker 2: is the CEO of HP and of course thank you

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Speaker 2: as well to Caroline Height of Bloomberg Tech and no

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Speaker 2: really pret please.

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Speaker 1: Bring us more when they mentioned Ferrari.

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Speaker 2: To exactly, I mean, Ferrari is really a tech company, right,

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Speaker 2: and each of their suspension pieces on the new SUV

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Speaker 2: are like supercomputers in themselves and on.

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Speaker 1: We seeing the pressure on the computer on wheels that

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Speaker 1: is Tesla at the moment, and just ultimately all of

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Speaker 1: these business Whenever you go to the mobile world congresses

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Speaker 1: of the world and the big tech conferences, it always

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Speaker 1: basically be about autos about to go there just as

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Speaker 1: a little shout out, But in general it has been

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Speaker 1: all about the autos, all about the intersection of car.

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Speaker 1: And it's so interesting when you speak to Mark Gumman,

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Speaker 1: just really saying the biggest loss that Apple ever made

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Speaker 1: was not doing the car anymore.

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Speaker 4: Same story, right, car play is so ubiquitous, but car

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Speaker 4: plays at threat in some ways.

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Speaker 2: Yes, No, that I think was the most interesting thing

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Speaker 2: I learned last week of anything.

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Speaker 1: But I also loved how you tried to push him on,

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Speaker 1: like where are these job cucks happening? How are they happening?

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Speaker 1: Because this is something we've got to focus on. When

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Speaker 1: you got Autodeskla software company today also announcing thirteen hundred

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Speaker 1: jobs going you got almost two thousand coming from HP.

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Speaker 1: This is a drip drip, drip effect. We are not

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Speaker 1: seeing the jobs being added that maybe we thought with technology,

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Speaker 1: data centers don't employ that many people.

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Speaker 4: And to the point that you've been making here so

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Speaker 4: many different job cuts for different reasons around the world

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Speaker 4: and in the United States. Remember Meta also announced some

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Speaker 4: drob cuts as well. Caroly And we have to leave

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Speaker 4: it there.

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Speaker 1: We thank you.

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Speaker 4: You're a real hero to the whole network this week