HP plans major job cuts to boost AI-driven innovation and cut costs by 2028

HP announces plans to eliminate up to 6,000 jobs globally by 2028, aiming to leverage artificial intelligence to accelerate product innovation and improve efficiency amid sector-wide transformation.

HP Inc. has announced plans to cut between 4,000 and 6,000 jobs globally by fiscal year 2028, a move aligned with its strategic pivot towards increased adoption of artificial intelligence (AI) to accelerate product innovation and improve operational efficiency. The company aims to generate approximately $1 billion in gross savings over three years through this restructuring initiative, which will affect teams in product development, internal operations, and customer support.

The job cuts follow previous layoffs earlier in 2025, when HP trimmed its workforce by 1,000 to 2,000 employees. While these workforce reductions reflect broader trends among major technology firms embracing AI-driven transformation, similar to recent layoffs at Microsoft and Amazon, HP insists it remains confident in its capacity to lead future workplace technology. CEO Enrique Lores highlighted the significant opportunities to embed AI across HP’s operations to enhance customer satisfaction and productivity.

Despite the restructuring, HP reported solid performance in the fiscal year ending October 31, 2025, with net revenues hitting $55.3 billion. Its Personal Systems division, which includes PC sales, saw an 8% year-over-year increase in revenue, driven in part by strong demand for AI-enabled PCs, which represented more than 30% of shipments in the fourth quarter. However, the printing unit experienced a 4% decline in net revenue, with hardware units overall dropping 12%. The company slightly exceeded revenue expectations in Q4 with $14.64 billion but lowered its adjusted earnings per share guidance for fiscal 2026 to a range of $2.90 to $3.20, underwhelming analyst forecasts.

HP faces challenges from rising global memory chip prices, attributed to surging demand from data centres and increased competition in the server market. These cost pressures are expected to impact profitability more severely in the latter half of fiscal 2026. To counteract these headwinds, HP is pursuing strategies including sourcing from lower-cost suppliers and adjusting pricing models.

Complementing its workforce transformation, HP plans to capitalise on ongoing Microsoft Windows transitions. The end of support for Windows 10 and the ongoing Windows 11 refresh are expected to sustain PC market momentum into 2026. Industry data from Gartner shows global PC shipments increased by 8.2% year-over-year in the third quarter of 2025, largely driven by the Windows upgrade cycle.

The emphasis on AI is also reflected across the tech sector, with companies like Dell reporting strong revenue growth and elevated AI-related demand. Dell’s AI server orders hit record levels, contributing to increased revenue guidance and underscoring the sector-wide impact of AI on hardware priorities.

HP estimates that restructuring costs related to these job cuts will total around $650 million, with approximately $250 million anticipated in fiscal 2026 alone. While the company acknowledges the short-term pain associated with workforce reductions, it projects these measures will ultimately accelerate product innovation and boost long-term value creation.

In summary, HP’s restructuring and AI investments underscore a strategic shift to remain competitive amid rapid technological change and supply chain pressures. By focusing on AI-enabled products and optimising costs, the company aims to strengthen its market position even as it navigates the complexities of a transforming tech landscape.

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Source: Fuse Wire