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HP Inc announced on Tuesday (local time) that it is planning to reduce its workforce by between 4,000 and 6,000 jobs worldwide by the end of fiscal 2028, as part of the company’s efforts to streamline operations and utilise artificial intelligence (AI) to accelerate product development, enhance customer satisfaction and boost productivity, sources reported.
The teams expected to be impacted include those focused on product development, internal operations and customer support, chief executive officer Enrique Lores said during a media briefing call.
Earlier this year, HP laid off 1,000 to 2,000 employees as part of a previously announced restructuring plan.
The cuts will lead to about $650 million in restructuring charges, including about $250 million in fiscal 2026, which began on November 1, the company said on Tuesday. HP had about 58,000 employees as of October 2024, sources reported.
Nearly three years ago, the PC maker unveiled a different cost-cutting programme aimed at reducing 4,000 to 6,000 jobs. At the time, the company employed 61,000 workers and said that the plan resulted in gross savings of $2.2 billion.
Profit for the year, excluding items such as restructuring charges, is expected to be between $2.90 and $3.20 a share. Analysts, on average, had projected $3.32.
HP expects earnings per share, excluding items, of 73 to 81 cents in the period ending January, compared with analysts’ average estimate of 78 cents.
Demand for artificial intelligence-enabled personal computers has continued to grow, accounting for more than 30 per cent of HP’s shipments in the fourth quarter ended October 31.
A global surge in memory chip prices, driven by rising demand from data centres, could increase costs and pressure profits at consumer electronics makers such as HP, Dell and Acer, Morgan Stanley analysts have warned.
The shortfall is due to rising memory chip costs, which are offsetting the benefits of a PC sales cycle. HP has enough inventory to reduce the impact in the first half of the year.
HP has been cutting costs and shifting manufacturing for almost all products sold in North America to facilities outside China to mitigate tariffs. Now, as customers replace older PCs and adopt new AI features, the company is facing rising memory prices.
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