HP has outlined a significant restructuring plan aimed at making the company more competitive as demand for AI-enabled technology accelerates. The company said it will cut between 4,000 and 6,000 jobs globally by fiscal 2028 to streamline operations and accelerate the integration of artificial intelligence across product development, internal processes and customer support functions.
HP had 58,000 employees in 59 countries at the end of fiscal 2025.
HP has already reduced its employees through fiscal year 2025. On November 18, 2022, HP announced the Future Ready Plan to support digital transformation, portfolio optimization, and operational efficiency, with implementation expected through fiscal year 2025. As part of this plan, HP anticipated reducing its workforce by approximately 7,000 employees. The company estimated incurring about $1.0 billion in pre-tax charges related to these reductions, mainly allocating $0.7 billion to labor costs, while the rest will address non-labor actions and other charges.
HP reported profit of $2,529 million for fiscal year that ended on October 31, 2025 as compared with $2,775 million in the previous fiscal.
CEO Enrique Lores said the restructuring will help HP sharpen execution, improve customer satisfaction and drive faster innovation across its product lines. The initiative is expected to generate around one billion dollars in gross run rate savings over the next three years. HP had already eliminated an additional one to two thousand roles earlier this year as part of its ongoing transformation strategy.
Despite the long-term focus on efficiency and AI-driven growth, HP shares dropped more than 5 percent in extended trading following the announcement. Lores said teams working in engineering, operations and customer support will experience the largest changes as the company redesigns workflows and increases automation to boost productivity.
AI-enabled PCs continue to play a growing role in HP’s portfolio, accounting for more than 30 percent of total shipments in the fourth quarter ended October 31. This rising adoption underscores the company’s commitment to advancing AI capabilities across devices as customers seek more intelligent and efficient computing experiences.
However, HP is also preparing for near-term challenges linked to global memory chip pricing. A surge in demand from data centers and intense competition in the server market have pushed up prices for DRAM and NAND chips, raising cost pressures for PC and electronics makers. Morgan Stanley analysts have warned that companies such as HP, Dell and Acer could face profitability constraints as memory component prices rise, Reuters news report said.
Lores noted that HP expects the financial impact of higher memory costs to become more evident in the second half of fiscal 2026. The company currently has sufficient inventory to manage the first half but is taking steps to reduce exposure. These include sourcing from lower cost suppliers, adjusting memory configurations and implementing price changes in selected markets. HP’s approach blends aggressive cost discipline with a strategic pivot toward AI-driven innovation. As the industry undergoes rapid transformation, the company aims to position itself for stronger long-term competitiveness while navigating short-term margin pressures.
Rajani Baburajan
