HP Job Cuts: 6,000 Roles Impacted by 2028 AI Push

HP Inc. plans to cut 4,000 to 6,000 jobs worldwide by fiscal 2028 as part of a strategy to streamline operations and integrate artificial intelligence. The company aims to speed up product development, improve customer satisfaction, and increase productivity through these efforts. After the announcement, HP’s shares fell 5.5% in after-hours trading.

The layoffs will impact teams in product development, internal operations, and customer support, according to CEO Enrique Lores, who spoke at a media briefing. Lores mentioned that this restructuring is expected to save about $1 billion in gross run rate over three years.

Earlier in February, HP had already laid off 1,000 to 2,000 employees as part of a restructuring plan. The company’s focus on AI has yielded tangible results, with AI-enabled PCs accounting for over 30% of HP’s shipments in the quarter ending October 31.

However, increased demand in data centres has driven up memory chip prices, which could raise costs and pressure profit margins across the industry. Morgan Stanley analysts warn that a global price rise in memory chips, driven by data centre demand, could affect consumer electronics firms such as HP, Dell, and Acer. Competition in the server market has also pushed up prices for DRAM and NAND memory chips.

Lores indicated that HP expects these price effects to begin impacting in the second half of fiscal 2026, although the company currently holds enough inventory for the first half. HP is adopting a cautious stance, implementing cost-saving measures such as qualifying lower-cost suppliers, reducing memory configurations, and adjusting prices.

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Financial forecasts for fiscal 2026 project an adjusted profit per share between $2.90 and $3.20, below the consensus estimate of $3.33. For the next quarter, HP expects adjusted profit per share of 73 to 81 cents, below the 79-cent estimate.