HP Announces Global Job Cuts, AI Integration Focus

HP Inc. expects to cut between 4,000 and 6,000 jobs globally by fiscal 2028. This initiative forms part of a plan to streamline operations and adopt artificial intelligence. The company aims to speed up product development, improve customer satisfaction, and boost productivity through this AI integration.

Credit: HP

Shares of the Palo Alto, California-based company fell 5.5% in extended trading.

Chief Executive Officer Enrique Lores stated that HP’s teams focused on product development, internal operations, and customer support would be impacted by the job reductions. He shared this information during a media briefing call.

Lores added that the initiative is expected to create USD 1 billion in gross run rate savings over three years. The company previously laid off an additional 1,000 to 2,000 employees in Feb. as part of a prior restructuring plan.

Demand for AI-enabled personal computers has continued to grow externally, reaching over 30% of HP’s shipments in the fourth quarter ended October 31.

Morgan Stanley analysts warned that a global memory chip price surge could increase costs and pressure profits at consumer electronics makers. This includes HP, Dell, and Acer, with the surge driven by rising demand from data centres.

The Big Tech industry’s push to build out AI infrastructure has led to price increases for dynamic random access memory and NAND. These are two commonly used types of memory chips, with high competition in the server market contributing to the situation.

Credit: HP

Lores stated that HP expects to experience the impact of higher price increases in the second half of fiscal 2026. The company currently has sufficient inventory in hand for the first half of the fiscal year.

Lores indicated that HP is adopting a prudent approach for its second-half outlook. This includes implementing aggressive actions such as qualifying lower cost suppliers, reducing memory configurations, and taking price actions.

For fiscal 2026, the company expects adjusted profit per share to be between USD 2.90 and USD 3.20. This is below analysts’ average estimate of USD 3.33, according to data compiled by LSEG.

HP anticipates adjusted first-quarter profit per share to be between USD 0.73 and USD 0.81. The midpoint of this range is below estimates of USD 0.79 per share.

Fourth-quarter revenue was USD 14.64 billion, surpassing estimates of USD 14.48 billion.

---

• HP Inc. plans to cut between 4,000 and 6,000 jobs globally by fiscal 2028.

• The job cuts are part of a strategy to streamline operations and adopt artificial intelligence for improved product development, customer satisfaction, and productivity.

• The initiative is expected to generate USD 1 billion in gross run rate savings over three years.

Source: REUTERS