HP to cut up to 6,000 jobs by FY28 as AI reshapes operations; shares sink 5.5%

HP Inc on Tuesday said it plans to cut between 4,000 and 6,000 jobs globally by fiscal 2028 as the personal computer and printing major looks to streamline operations and deploy artificial intelligence (AI) more widely across product development and internal processes.

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

The cuts will impact teams involved in product development, internal operations and customer support, HP President and CEO Enrique Lores said during a media briefing call.

“We expect this initiative will create USD 1 billion in gross run-rate savings over three years,” he said.

The company had already laid off an additional 1,000 to 2,000 employees in February under an earlier restructuring programme.

HP said demand for AI-enabled personal computers continued to accelerate, accounting for more than 30% of its total PC shipments in the fourth quarter ended October 31.

However, the company flagged rising cost pressures from a surge in global memory chip prices driven by heavy AI-related investments by technology giants and increased competition in the server market.

Morgan Stanley analysts have warned the price spike could squeeze margins at consumer electronics makers, including HP, Dell and Acer.

Lores said HP expects to feel the impact in the second half of fiscal 2026.

“We are taking a prudent approach to our guide for the second half, while at the same time implementing aggressive actions like qualifying lower cost suppliers, reducing memory configurations and taking price actions,” he said, adding the company has sufficient inventory for the first half of the year.

HP projected fiscal 2026 adjusted earnings of USD 2.90 to USD 3.20 per share, below analysts’ average estimate of USD 3.33, according to LSEG data.

For fiscal 2025, HP reported net revenue of USD 55.3 billion, up 3.2% from a year earlier. Fourth-quarter revenue rose to USD 14.64 billion, beating market expectations of USD 14.48 billion.

The company generated USD 3.7 billion in operating cash flow and USD 2.9 billion in free cash flow during the year, returning 66% of the latter to shareholders through share buybacks and dividends.

“FY25 results reinforce the power of our portfolio and the strength of our team in a dynamic environment,” Lores said, adding the company will focus on disciplined execution and AI-driven innovation in fiscal 2026.

CFO Karen Parkhill said HP is taking “decisive actions” to offset cost headwinds while continuing to invest in AI-led initiatives aimed at improving productivity and customer experience.