HP Inc. to Trim Workforce as AI Restructuring Plan Expands
The cuts are part of a multi-year overhaul aimed at streamlining operations, offsetting higher component costs and accelerating AI-led product development.
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[Image source: Chetan Jha/MITSMR India]
Consumer and commercial PC maker HP Inc. said on Tuesday it will eliminate between 4,000 and 6,000 jobs globally by fiscal 2028 as part of a sweeping restructuring aimed at reducing costs and embedding AI more deeply across its operations.
The cuts represent roughly 7–10% of the company’s workforce and will hit teams in product development, internal operations and customer support, CEO Enrique Lores said during a media briefing.
“We expect this initiative will create $1 billion in gross run rate savings over three years,” Lores said.
Despite a modest beat on quarterly revenue, shares of the Palo Alto, California-based company slid about 5.5% in after-hours trading.
The job-cut announcement builds on earlier reductions this year, when HP shed a further 1,000–2,000 positions under a separate restructuring initiative.
HP’s push into AI-equipped personal computers appears central to the strategy: for the quarter ended October 31, “AI-enabled PCs” accounted for more than 30% of its shipments, according to the company.
Yet the broader market backdrop complicates the narrative. Memory-chip prices have spiked as demand surges from data-center expansion and competing server demand, squeezing margins for PC makers including HP, Dell and Acer.
Analysts warned rising component costs could weigh on profitability in the second half of fiscal 2026.
To offset this, Lores said HP plans to qualify lower-cost suppliers, reduce memory configurations and adjust pricing.
“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 said.
HP’s 2026 guidance reflects caution. The company forecast adjusted earnings per share of $2.90–$3.20 for the year, below analysts’ average estimate of $3.33.
For the quarter ending October 31, HP posted revenue of $14.64 billion, slightly ahead of expectations, and net income rose to $795 million from $763 million a year earlier.
The personal systems division reported an 8% year-on-year increase in revenue to $10.35 billion, supported by customers upgrading older devices and rising interest in PCs with AI-focused chips.
The printing business declined 4% to $4.3 billion amid weak demand and heightened price competition.
HP expects to complete the headcount reductions by the end of fiscal 2028 and projects restructuring costs of about $650 million, including $250 million next year.
Looking ahead, Lores told investors the firm sees a “significant opportunity” to embed AI across products, service operations and internal workflows in a transformation he expects to drive both innovation and efficiency.
