by Sacramento, CA – HP Inc. announced Tuesday that it plans to lay off 4,000 to 6,000 employees worldwide by fiscal 2028 as part of a sweeping restructuring focused on streamlining operations and accelerating its shift toward artificial intelligence.
The cuts—which would affect up to 10% of HP’s global workforce—will impact teams involved in product development, internal operations and customer support, CEO Enrique Lores said during a media briefing. Following the announcement, HP shares fell more than 5% in after-hours trading.
Lores said the restructuring initiative is expected to generate $1 billion in gross run-rate savings over the next three years. The company had already eliminated 1,000 to 2,000 jobs in February under an earlier cost-cutting plan.
AI Demand Rising, but Chip Costs Loom
HP is making the move as demand for AI-enabled PCs grows. Such devices accounted for over 30% of HP’s shipments in the quarter ending Oct. 31.
But rising interest in AI infrastructure has caused a global spike in memory chip prices, driven by competition among data centers and server manufacturers. Analysts at Morgan Stanley warn the price surge could squeeze margins at PC makers including HP, Dell and Acer.
The higher memory costs—particularly for DRAM and NAND chips—are expected to hit HP hardest in the second half of fiscal 2026. The company says it has enough inventory to avoid major impacts in the first half.
“We are taking a prudent approach to our guide for the second half, while implementing aggressive actions like qualifying lower-cost suppliers, reducing memory configurations and taking price actions,” Lores said.
Financial Outlook Falls Short of Expectations
HP projected fiscal 2026 adjusted earnings of $2.90 to $3.20 per share, below analyst expectations of $3.33, according to LSEG data.
For the upcoming quarter, HP expects adjusted earnings of 73 to 81 cents per share, with the midpoint under Wall Street’s forecast.
The company reported $14.64 billion in fourth-quarter revenue, beating analyst estimates of $14.48 billion.
