HP plans to cut up to 6,000 jobs by 2028 as it accelerates its shift toward AI-driven product development amid rising chip costs and weakening profit forecasts.
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| HP’s plan to eliminate 6,000 jobs reflects a sweeping shift toward AI innovation—while rising memory costs and profit pressure reshape its long-term strategy. Image: CH |
Palo Alto, California, United States — November 26, 2025:
HP Inc. has announced one of its most significant restructuring moves in recent years, revealing plans to cut 4,000 to 6,000 jobs globally by fiscal 2028 as it intensifies its push into artificial intelligence. The decision arrives as the company seeks to streamline operations, invest more aggressively in AI-led product development, and tighten efficiency across internal teams.
The announcement immediately weighed on investor sentiment. HP shares dropped 5.5% in extended trading, underscoring market concerns over both the scale of the layoffs and the company’s softer profit outlook.
CEO Enrique Lores said the job cuts would affect groups tied to product development, internal operations, and customer support, signaling a major restructuring of core functions. According to Lores, the initiative aims to generate $1 billion in gross run-rate savings over the next three years, capital that will help fuel HP’s expanded AI initiatives.
This move follows an earlier round of layoffs in February, when HP shed 1,000 to 2,000 roles as part of its ongoing restructuring program. The latest cuts highlight a significant acceleration in the company’s transition strategy, coinciding with rapid market adoption of AI technology. HP reported that AI-enabled PCs made up more than 30% of its fourth-quarter shipments, reflecting strong external demand.
The restructuring unfolds as HP faces new pressures from the global semiconductor market. Morgan Stanley analysts warn that a surge in demand from AI-focused data centers has driven up prices for DRAM and NAND memory chips, essential components in consumer and enterprise hardware. Higher costs could strain margins for PC makers including HP, Dell, and Acer.
Lores said HP expects the financial impact to appear in the second half of fiscal 2026, although the company has enough current inventory to cushion the earlier months. To mitigate rising costs, HP is taking “aggressive actions,” including qualifying lower-cost suppliers, reducing memory configurations, and implementing selective product price increases.
HP’s updated forecasts reflect a cautious approach. The company projects fiscal 2026 adjusted earnings per share (EPS) of $2.90 to $3.20, noticeably below analysts’ average expectation of $3.33. First-quarter EPS guidance of $0.73 to $0.81 also lands around or below market estimates.
Still, HP delivered a modest win for the latest quarter, reporting $14.64 billion in revenue, surpassing the expected $14.48 billion. The revenue beat suggests steady performance in parts of the business even as larger industry challenges mount.
HP’s decision to cut thousands of jobs marks a pivotal shift for a company balancing cost pressures, changing PC market dynamics, and the strategic necessity of AI integration. The restructuring signals a belief that AI—both in device capabilities and internal operations—will be central to HP’s future competitiveness.
Yet with rising component costs, a softening profit outlook, and significant workforce disruption ahead, HP faces a complex transition. The next several years will test whether its aggressive cost-cutting and AI investments can deliver the long-term value the company needs in an increasingly competitive global tech landscape.