HP Inc. announced plans to cut 4,000 to 6,000 jobs worldwide by fiscal 2028 as part of a wide restructuring effort aimed at reducing costs and accelerating its transition to artificial intelligence, powered operations.
CEO Enrique Lores said the changes will affect teams involved in product development, internal operations, and customer support, noting that the shift to AI systems will help HP work more efficiently across the company.
“We expect this initiative will create $1 billion in savings over the next three years,” Lores said during a media briefing.
A Continued Restructuring Effort
The company has already been through multiple rounds of cuts in recent years. Earlier in 2024, HP reduced its workforce by another 1,000 to 2,000 employees, following previously announced plans. In 2022, HP also announced a multi-year restructuring program with similar job-cut targets. The new layoffs represent roughly 7% to 10% of HP’s global workforce.
AI PCs Are Growing, But Costs Are Rising
HP reported that demand for AI-enabled PCs continues to increase, accounting for more than 30% of HP’s PC shipments in the fourth quarter ending October 31.
However, the company is also facing challenges. A global surge in memory chip prices, driven by heavy AI infrastructure spending from big tech companies, is raising costs for PC makers. Analysts at Morgan Stanley warned that higher DRAM and NAND prices could pressure profits at companies like HP, Dell, and Acer.
Lores said HP expects the most significant impact from rising memory costs in the second half of fiscal 2026, although the company has enough inventory to manage the first half. HP is working to offset the increases by:
- Qualifying lower-cost suppliers
- Reducing memory configurations in some models
- Adjusting product pricing
Financial Outlook
HP reported $14.64 billion in revenue for the fourth quarter, slightly above expectations. But its forecast for the next two years came in below analyst estimates:
- Fiscal 2026 adjusted EPS: $2.90 to $3.20 (vs. $3.33 expected)
- Q1 adjusted EPS: $0.73 to $0.81
Despite the financial pressure, HP says the restructuring and AI investments are necessary to stay competitive in the rapidly evolving PC market.
