HP to Cut 6,000 Jobs by 2028 as AI Reshapes Its Global Operations

HP Inc. is gearing up for one of its most significant restructuring efforts in recent years, announcing plans to eliminate between 4,000 and 6,000 jobs worldwide by fiscal 2028. The move is part of a sweeping transformation aimed at making the company leaner, more agile, and better prepared for a future dominated by artificial intelligence.

CEO Enrique Lores described the restructuring as a “necessary step to stay competitive,” emphasising that the changes will touch nearly every part of HP’s global operations. Following the announcement, HP’s stock slipped 5.5% in extended trading, reflecting investor concern over the short-term impact of the shake-up.

AI at the Centre of HP’s Strategy

HP expects the overhaul to generate around $1 billion in annual savings by 2028. These savings will largely come from the deeper integration of AI tools across the business. According to Lores, “It’s something we have to do to make sure the company stays competitive,” explaining that AI will be embedded in product design, sales, customer service, and manufacturing.

The company sees AI as a long-term growth driver rather than a temporary fix, positioning this transformation as essential to safeguarding HP against future technological shifts.

Restructuring to Hit Key Teams

The job cuts will primarily affect roles in product development, internal operations, and customer support. “We expect this initiative will create $1 billion in gross run rate savings over three years,” Lores said during a briefing.

This decision follows earlier trims—HP laid off 1,000 to 2,000 employees earlier in the year—but the latest announcement marks a more aggressive push as automation takes centre stage.

AI PCs Continue to Gain Momentum

Despite the impending layoffs, HP remains optimistic about the booming market for AI-enabled personal computers. The company reported that AI-powered laptops made up more than 30% of its total shipments in the fourth quarter ending October 31.

With more consumers and businesses demanding devices capable of running on-device AI models, HP expects this category to remain a core revenue driver.

Rising Memory Chip Costs Pose New Challenges

The company’s path forward is not without headwinds. Rising global memory chip prices—driven by the surge in AI infrastructure—are expected to squeeze profit margins. Morgan Stanley analysts warn that DRAM and NAND chips, essential for PCs and servers, will continue to get more expensive.

Lores acknowledged the challenge, saying HP anticipates feeling the impact by the second half of fiscal 2026. “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,” he noted.

Muted Profit Outlook

Reflecting this cautious stance, HP projected a fiscal 2026 adjusted profit per share between $2.90 and $3.20—below market expectations. Its forecast for the upcoming quarter also came in slightly under analyst estimates.

HP now joins a growing list of global tech giants restructuring their workforces as AI reshapes business models. Amazon and Apple have also recently scaled back staff to realign with their evolving AI-first strategies.

As HP embarks on this transformation, the company is betting that automation and innovation will outweigh the near-term disruption—and ultimately help it thrive in an increasingly AI-driven world.