HP to cut about 6,000 jobs by 2028, ramps up AI efforts

HP Inc. has revealed plans to reduce its workforce by 4,000 to 6,000 positions worldwide by the fiscal year 2028. This decision is part of a broader strategy aimed at streamlining operations and leveraging artificial intelligence to enhance product development, elevate customer satisfaction, and increase overall productivity. During a recent media briefing, CEO Enrique Lores indicated that the job reductions will primarily affect teams involved in product development, internal operations, and customer support. Lores projected that this initiative could save the company $1 billion in gross run rate over the next three years. Earlier this year, HP had already cut an additional 1,000 to 2,000 jobs as part of a previously announced restructuring effort. The demand for AI-enabled PCs has surged, accounting for over 30% of HP's shipments in the fourth quarter ending October 31. However, the company faces challenges due to a global increase in memory chip prices, driven by heightened demand from data centers. Analysts from Morgan Stanley have cautioned that this could lead to rising costs and squeeze profit margins for consumer electronics manufacturers like HP, Dell, and Acer. Lores also mentioned that HP anticipates experiencing the effects of these price increases in the latter half of fiscal 2026. While the company has sufficient inventory for the first half, a careful strategy is in place for the upcoming months, which includes diversifying suppliers and adjusting memory configurations to mitigate costs. For fiscal 2026, HP projects adjusted profit per share between $2.90 and $3.20, falling short of the analysts' average estimate of $3.33. For the first quarter, the adjusted profit per share is expected to be between 73 cents and 81 cents, with the midpoint below the consensus estimate of 79 cents. Despite these challenges, HP reported fourth-quarter revenue of $14.64 billion, surpassing estimates of $14.48 billion.