HP Plans Up to 6,000 Job Cuts as AI Adoption Reshapes Operations

HP Plans Up to 6,000 Job Cuts as AI Adoption Reshapes Operations
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HP Inc. said it will eliminate between 4,000 and 6,000 jobs worldwide by fiscal 2028 as part of a broad restructuring initiative, Reuters reported. The company said the plan aims to streamline operations and expand the use of artificial intelligence to accelerate product development, enhance customer support and increase productivity. Shares fell 5.5% in extended trading following the announcement.

CEO Enrique Lores told reporters that teams involved in product development, internal operations and customer service will be most affected. He added that the initiative is expected to generate about $1 billion in annualized savings within three years. The cuts follow an additional 1,000 to 2,000 layoffs announced in February under an earlier restructuring plan.

HP said demand for AI-enabled PCs has strengthened, accounting for more than 30% of its shipments in the fourth quarter ended Oct. 31. However, rising global memory chip prices—driven by heavy data-center investment and intense competition in the server market—are expected to pressure costs for computer manufacturers.

Lores said HP anticipates higher component costs beginning in the second half of fiscal 2026 but has sufficient inventory for the first half. The company forecast fiscal 2026 adjusted earnings of $2.90 to $3.20 per share, below analysts’ expectations. First-quarter adjusted profit is projected between 73 and 81 cents per share. HP reported fourth-quarter revenue of $14.64 billion, slightly above market estimates.