HP plans to cut up to 6,000 jobs as it shifts focus to AI.

HP to Cut Jobs as Part of Streamlining Efforts

HP announced on Tuesday its intention to reduce its global workforce by 4,000 to 6,000 jobs by the end of fiscal 2028. This decision is part of a broader strategy aimed at optimizing operations and leveraging artificial intelligence to enhance product development, boost customer satisfaction, and increase overall productivity.

Following this revelation, the company’s stock saw a decline of over 5% during after-hours trading.

According to CEO Enrique Lores, the layoffs will target teams in product development, internal operations, and customer support, potentially affecting nearly 10% of HP’s workforce.

“We anticipate this initiative will lower our total run rate by $1 billion over three years,” Lores remarked during a press briefing.

This is not the first round of layoffs for HP; earlier in February, the company laid off another 1,000 to 2,000 employees as part of a previously announced restructuring plan.

There’s a growing demand for AI-powered PCs, which accounted for over 30% of HP’s shipments in the fourth quarter that ended on October 31. However, there are warnings from analysts at Morgan Stanley that rising global memory chip prices—driven by increased demand from data centers—could lead to higher costs, which might erode profits for consumer electronics manufacturers such as HP, Dell, and Acer.

The push by major tech companies to develop AI infrastructure has intensified competition in the server market, resulting in higher prices for common memory types like dynamic random access memory and NAND.

Lores indicated that HP expects to face significant price increases in the latter half of fiscal 2026 but reassured that the company currently has sufficient inventory for the first half. “We’re being cautious with our second-half guidance while also taking proactive measures, including working with low-cost suppliers and adjusting memory configurations,” he stated.

As for financial expectations, HP forecasts adjusted earnings per share to be in the range of $2.90 to $3.20 in 2026, which falls below the average analyst estimate of $3.33, as reported by data from LSEG.

Furthermore, during the first quarter, HP anticipates adjusted earnings per share to be between 73 cents and 81 cents, with the average expected to fall short of the target of 79 cents per share.