HP to reduce global workforce by 6,000 as AI reshapes product strategy

HP Inc expects to cut between 4,000 and 6,000 jobs globally by fiscal 2028 as the computer maker ramps up its use of artificial intelligence to streamline operations and accelerate product development. The move is part of a multi-year effort to sharpen efficiency and reduce costs, Reuters reported. Shares fell 5.5 per cent in extended trading after the announcement.

Chief executive Enrique Lores told reporters the reductions will affect teams involved in product development, internal operations and customer support. He said the restructuring is expected to generate USD 1 billion in gross run-rate savings over three years. HP laid off a further 1,000 to 2,000 employees in February as part of an earlier restructuring plan.

AI-enabled PCs now account for more than 30 per cent of HP’s shipments in the quarter ending 31 October, underscoring the company’s push to reposition itself as demand shifts towards higher-performance devices. At the same time, analysts at Morgan Stanley warned that a global surge in memory chip prices — driven by intense competition among data-centre operators building AI infrastructure — could raise costs for manufacturers such as HP, Dell and Acer.

Lores said HP expects the impact of rising chip prices to be felt from the second half of fiscal 2026, with higher cost pressures likely. The company has sufficient inventory for the first half, he said. HP plans to respond by qualifying lower-cost suppliers, reducing memory configurations and taking pricing actions to offset the increases.

The company expects adjusted profit per share of USD 2.90 to USD 3.20 in fiscal 2026, below analyst expectations of USD 3.33, according to estimates compiled by LSEG. First-quarter adjusted profit is forecast between 73 and 81 cents per share, with the midpoint slightly under market projections.

HP’s restructuring comes as global PC and electronics manufacturers face a complex mix of AI-led demand shifts, supply chain pressures and rising input costs. As more firms rush to build AI capacity, industry watchers say competition for components — particularly memory — will intensify, adding volatility to margins and forcing operational adjustments.

Lores said the company is taking a “prudent approach” to its outlook while acting aggressively to manage costs. Analysts expect technology manufacturers to continue pursuing automation and supplier diversification as AI reshapes product roadmaps and cost structures across the sector.