Technology giant HP Inc. is making a major strategic push into artificial intelligence—but at a significant human cost: the company plans to cut between 4,000 and 6,000 jobs globally by the end of fiscal year 2028.
These workforce reductions are part of HP’s “Fiscal 2026 Plan,” which prioritizes AI adoption and enablement to boost productivity, accelerate product innovation, and enhance customer engagement. The restructuring underscores HP’s belief that AI will fundamentally reshape its workforce—a trend being closely watched across the tech sector.
Key Areas Impacted
The planned job cuts will span multiple departments rather than targeting a single function. According to CEO Enrique Lores, employees in product development, internal operations, and customer support will be affected as HP rolls out AI integration company-wide.
HP anticipates substantial financial benefits from these moves, projecting annual operating cost savings of approximately $1 billion by the end of fiscal 2028. However, the restructuring itself will incur around $650 million in combined workforce and non-workforce expenses, with roughly $250 million expected to be recognized in fiscal 2026, the company stated.
This latest round of layoffs follows an earlier restructuring earlier this year, which already eliminated 1,000 to 2,000 positions.
Financial Performance and Outlook
HP’s most recent financial results were mixed. The company reported $55.3 billion in net revenue for fiscal 2025, a 3.2% increase from the prior year. Fourth-quarter revenue came in at $14.6 billion, surpassing analyst expectations.
Lores highlighted the company’s sustained momentum, stating, “Our strategy to lead the future of work continues to deliver strong results, marking our sixth consecutive quarter of revenue growth.” He added that the focus for the coming year will be on “disciplined execution” to ensure the plan “translates into long-term shareholder value.”
Despite positive revenue trends, HP’s profit forecast fell short of some analysts’ estimates. The company projects adjusted earnings per share for fiscal 2026 to range between $2.90 and $3.20—slightly below the consensus estimate of $3.33, according to data compiled by LSEG.
AI Investment Amid Cost Headwinds
HP’s aggressive AI push comes as it navigates broader market challenges. Prices for memory chips—including DRAM and NAND—are surging, driven by soaring data center demand for AI infrastructure.
This pricing pressure is expected to raise costs for consumer electronics manufacturers. HP anticipates feeling the impact of these higher component prices in the second half of fiscal 2026.
In response, Lores noted, “We are taking a cautious approach to our second-half guidance while implementing proactive measures such as qualifying lower-cost suppliers, reducing memory configurations, and taking pricing actions.”
Even before the full rollout of its new strategy, HP’s AI focus is already evident in its product lineup: AI-enabled PCs accounted for more than 30% of its shipments in the fourth quarter ended October 31.
