HP to Cut Up to 6,000 Jobs by 2028 While Expanding AI Initiatives

HP Inc. announced on Tuesday that it plans to reduce its global workforce by approximately 4,000 to 6,000 jobs by fiscal 2028. This decision aims to streamline operations and enhance the company’s efforts in artificial intelligence (AI), which are intended to accelerate product development, elevate customer satisfaction, and increase productivity.

During a media briefing, CEO Enrique Lores indicated that the job cuts would primarily impact teams involved in product development, internal operations, and customer support. He emphasized the potential benefits of this initiative, stating, “We expect this initiative will create $1 billion in gross run rate savings over three years.”

The forthcoming layoffs follow a previous reduction of 1,000 to 2,000 employees in February as part of a restructuring plan. The company is adapting to shifting market demands, particularly as interest in AI-enabled personal computers has surged, accounting for over 30 percent of HP’s shipments in the fourth quarter ending October 31.

Challenges in the Supply Chain and Financial Outlook

According to analysts at Morgan Stanley, a global surge in memory chip prices, driven by increased demand from data centers, may lead to higher costs that could pressure profits for consumer electronics manufacturers, including HP, Dell, and Acer. The push from major technology firms to expand AI infrastructure has intensified competition for memory chips, particularly dynamic random access memory and NAND.

Lores noted that HP expects to feel the effects of rising costs in the second half of fiscal 2026. He stated, “We are taking a prudent approach to our guide for the second half, while at the same time implementing aggressive actions like qualifying lower-cost suppliers, reducing memory configurations, and taking price actions.”

The company projects an adjusted profit per share for fiscal 2026 to be between $2.90 and $3.20, which falls short of analysts’ average estimate of $3.33, based on data compiled by LSEG. Additionally, HP anticipates an adjusted profit per share between 73 cents and 81 cents for the first quarter, with the midpoint below expectations of 79 cents.

In the fourth quarter, HP reported revenues of $14.64 billion, exceeding estimates of $14.48 billion. The company’s proactive measures and strategic pivots seek to navigate the evolving landscape of technology and consumer demand while preparing for the challenges ahead.