HP Inc. announced Tuesday that it plans to eliminate between 4,000 and 6,000 jobs worldwide by fiscal 2028 as part of a broad restructuring strategy aimed at streamlining operations and expanding the company’s use of artificial intelligence. The cost-cutting plan is designed to accelerate product development, improve customer experience, and enhance overall productivity, reports Reuters.
Shares of the Palo Alto–based technology company fell 5.5% in extended trading following the announcement.
CEO Enrique Lores said the job cuts will affect teams involved 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 media briefing.
The cuts follow layoffs earlier this year, when HP shed an additional 1,000 to 2,000 employees as part of an ongoing restructuring program.
The company is seeing strong demand for AI-enabled PCs, which accounted for more than 30% of HP’s shipments in the fourth quarter ending October 31. But rising global memory chip prices — driven by the surge in AI infrastructure investment and intense competition in the server market — are raising concerns about cost pressures for PC manufacturers such as HP, Dell, and Acer.
Morgan Stanley analysts have warned that price increases for DRAM and NAND memory chips could squeeze margins across the consumer electronics sector. Lores said HP expects to feel the impact of these higher component prices in the second half of fiscal 2026. The company has sufficient inventory to manage costs through the first half of the year.
“We are taking a prudent approach to our guidance for the second half, while implementing aggressive actions like qualifying lower-cost suppliers, reducing memory configurations, and adjusting pricing,” Lores noted.
HP forecast fiscal 2026 adjusted earnings of $2.90 to $3.20 per share — below analysts’ average estimate of $3.33, according to LSEG data. The company expects first-quarter adjusted earnings between 73 and 81 cents per share, with the midpoint slightly under analysts’ expectations of 79 cents.
Fourth-quarter revenue came in at $14.64 billion, topping estimates of $14.48 billion.
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