The company, which manufactures PCs and printers, intends to cut its global workforce by 4,000 to 6,000 employees before the end of fiscal 2028, it said on Tuesday, driven by a strategy that embraces faster AI adoption across operations.
According to the company's CEO, Enrique Lores, teams in product development, internal operations, and customer support will be most affected by the cuts. This reduction follows an earlier round of layoffs earlier this year, during which HP said it let go of 1,000 to 2,000 employees under a prior restructuring plan.
HP said the restructuring is aimed at streamlining processes, integrating AI tools to increase productivity and accelerate product development, and serving customers better. The initiative is expected to generate gross run‑rate savings of around US$1 billion over three years.
The company estimates labour and non-labour restructuring costs to be approximately US$650 million, of which US$250 million was booked during fiscal 2026.
Despite the layoffs, HP's demand for AI‑enabled PCs has remained robust. During the quarter that ended on October 31, more than 30% of HP's PC shipments reportedly included specialized AI chips, a signal of growing market interest in devices capable of running on‑device AI workloads.
But the company is also facing headwinds: a global surge in memory‑chip prices - driven by heavy demand from AI infrastructure and data‑centre buildouts - threatens to squeeze margins for PC makers across the industry, including HP. Analysts have flagged the rising cost of DRAM and NAND chips as a major concern.
In its earnings forecast, HP predicted fiscal 2026 adjusted earnings per share between US$2.90 and US$3.20, short of analyst estimates. On a brighter note, its Q4 revenue reached US$14.64 billion, shy of forecasts, while the cost pressures and restructuring moves have caused investor jitters.
The announcement places HP among a growing list of technology companies reshaping their workforces as they pivot toward AI-driven operations. This shift underscores both the promise and the disruption that rapid AI adoption poses to the tech industry.