HP to Cut Up to 6,000 Jobs by 2028 as It Expands AI Integration: HP has announced a major global restructuring plan that includes cutting between 4,000 and 6,000 jobs by fiscal 2028. The company aims to streamline operations, boost efficiency, and accelerate its transition into an AI-driven future. However, the announcement has also raised concerns among investors, especially amid rising memory chip costs and pressure on profit margins.
Below is the full story, rewritten in five clear points.
1. HP Accelerates AI Adoption to Enhance Efficiency
As part of its long-term transformation strategy, HP expects to save $1 billion annually by 2028 through increased use of artificial intelligence across its operations.
AI tools will be deployed in product development, sales, customer service, and manufacturing to automate workflows, cut operational costs, and speed up innovation.
CEO Enrique Lores emphasised that this shift is essential to keep the company competitive in a rapidly evolving tech landscape.
2. Up to 6,000 Job Cuts Across Key Teams
The restructuring plan includes layoffs across product development, internal operations, and customer support.
The initiative is expected to deliver $1 billion in gross run-rate savings over three years.
Earlier this year, HP had already laid off 1,000–2,000 employees, but the new cuts reflect a much more aggressive move toward automation and cost optimisation.
3. AI-Powered PC Demand Continues to Surge
Even as it cuts jobs, HP remains optimistic about its AI PC portfolio.
AI-enabled laptops made up over 30% of its total shipments in the quarter ending October 31.
These next-generation devices are becoming increasingly popular as businesses and consumers look for laptops capable of running on-device AI models for productivity and creative tasks.
4. Rising Memory Chip Costs Pose New Challenges
HP faces fresh financial pressure from the sharp rise in DRAM and NAND memory chip prices, driven largely by global AI infrastructure demand.
Morgan Stanley analysts warn that this trend could squeeze profit margins for PC makers such as HP, Dell, and Acer.
HP expects this impact to intensify by the second half of fiscal 2026 but says it is prepared with adequate short-term inventory and strategies like cost-optimized suppliers and reduced memory configurations.
5. HP Issues a Cautious Profit Outlook
Reflecting these challenges, HP has issued a conservative forecast for fiscal 2026, projecting adjusted earnings per share between $2.90 and $3.20, below market expectations.
Its first-quarter guidance also falls slightly short, with expected earnings between 73 and 81 cents per share.
HP now joins other major tech companies—including Amazon and Apple—that have recently announced restructuring efforts and job reductions as they shift toward AI-centric business models.
Conclusion
HP’s decision to cut thousands of jobs underscores the dual impact of AI adoption—driving innovation and operational gains while triggering significant workforce transformations.
The company is betting that deeper automation and AI integration will secure its long-term competitiveness, even as it navigates rising component costs and a cautious financial outlook.
