HP to cut up to 6,000 jobs by 2028 as it accelerates AI-driven transformation

HP Inc has announced plans to cut between 4,000 and 6,000 jobs globally by fiscal 2028 as part of a restructuring initiative aimed at streamlining operations and expanding its use of artificial intelligence across product development and support functions. The company said the move is intended to speed up innovation, enhance customer satisfaction and improve overall productivity, stated a report by Reuters.

Shares of the California-based firm fell 5.5% in extended trading following the announcement.

Chief executive Enrique Lores stated during a media briefing that teams involved in product development, internal workflows and customer support would be affected by the job reductions. He informed reporters that the initiative is expected to generate around $1 billion in gross run-rate savings over the next three years.

HP had previously laid off an additional 1,000 to 2,000 employees in February as part of an earlier restructuring plan, as per the Reuters report.

The company noted that demand for AI-enabled PCs continues to grow, accounting for more than 30% of HP’s shipments in the fourth quarter ended 31 October.

However, analysts at Morgan Stanley have warned that rising memory chip prices—driven by increased demand from data centres building AI infrastructure—could raise costs and pressure margins for PC manufacturers including HP, Dell and Acer. Prices for both DRAM and NAND memory have already begun climbing amid heightened competition in the server market.

Lores stated that HP expects to feel the impact of these cost increases in the second half of fiscal 2026. He added that the company has sufficient inventory for the first half of the year. He further said that HP is taking a cautious approach to its guidance, while also taking mitigating steps such as qualifying lower-cost suppliers, reducing memory configurations and implementing price adjustments.

HP projected adjusted profit per share of between $2.90 and $3.20 for fiscal 2026, below the analysts’ average estimate of $3.33, according to LSEG data. For the first quarter, HP expects adjusted earnings of 73 to 81 cents per share, with the midpoint falling short of forecasts.

The company reported fourth-quarter revenue of $14.64 billion, exceeding expectations of $14.48 billion.