Hewlett Packard Enterprise (HPE) reported its fiscal first-quarter earnings, with revenue reaching $7.85 billion, a 16% increase year-over-year, and adjusted earnings per share of $0.49, in line with analyst expectations. Despite these figures, HPE's shares experienced a significant decline of up to 20% in after-hours trading due to a weak outlook for the second quarter and the full year. The company announced plans to cut approximately 3,000 jobs, with 2,500 positions being eliminated directly and the remainder through attrition, as part of a cost-reduction program expected to save $350 million by fiscal 2027. This decision comes amidst challenges in HPE's server business, which saw a 29% revenue increase to $4.3 billion but faced margin pressures due to higher-than-normal inventory of AI servers, a rapid transition to Nvidia's Blackwell GPUs, and aggressive market discounting. HPE's guidance for the second quarter projects revenue between $7.2 billion and $7.6 billion, falling short of the $7.93 billion expected by analysts, and adjusted earnings per share of $0.28 to $0.34, significantly below the anticipated $0.50. For the full year, HPE forecasts adjusted earnings per share between $1.70 and $1.90, trailing the consensus estimate of $2.13. The company is also grappling with the impact of U.S. tariffs, which are expected to affect profitability. HPE is evaluating mitigation strategies, including leveraging its global supply chain and adjusting prices. Additionally, HPE's proposed $14 billion acquisition of Juniper Networks faces a legal challenge from the U.S. Justice Department, with a trial set for July 9, and the company is dealing with execution issues and server margin pressure in both traditional and AI server segments.