HP Inc. has announced that it will cut between 4,000 and 6,000 jobs globally by fiscal 2028, as part of a multi-year plan to streamline operations and accelerate its adoption of artificial intelligence across product development and customer support.
The restructuring plan is aimed at boosting efficiency, enhancing AI-driven innovation and improving customer satisfaction, CEO Enrique Lores said during a media briefing. The company expects the initiative to generate $1 billion in gross run-rate savings over three years.
HP shares fell 5.5% in extended trading following the announcement.
AI at the Center of HP’s Overhaul
HP said teams across product development, internal operations and customer support will be affected by the job cuts as the company works to integrate AI deeper into its business model. Demand for AI-enabled PCs continues to rise, with such devices accounting for over 30% of HP’s shipments in the fourth quarter ended 31 October 2025.
The company previously laid off 1,000 to 2,000 employees in February as part of an earlier restructuring effort.
Memory Chip Costs Expected to Rise
HP also faces external cost pressures driven by the global surge in memory chip prices, driven by strong demand from data centers and intensified competition in the server market.
Analysts at Morgan Stanley have warned that rising costs for DRAM and NAND chips could weigh on margins for consumer electronics manufacturers such as HP, Dell and Acer.
Lores said HP expects the memory-related impact to be felt in the second half of fiscal 2026, noting that the company currently has sufficient component inventory for the first half.
“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,” Lores said.
Profit Guidance Falls Below Expectations
HP forecast adjusted fiscal 2026 earnings per share of $2.90 to $3.20, below analysts’ expectations of $3.33, according to LSEG data.
For the first quarter, the company expects adjusted earnings of 73 to 81 cents per share, with the midpoint slightly below market estimates.
The company’s transformation plan aims to boost long-term competitiveness as AI reshapes the global PC and enterprise technology landscape.
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