Key takeaways
- HP plans to lay off 4,000 to 6,000 employees by 2028 to streamline operations.
- Focus on AI initiatives aims to generate $1 billion in savings over three years.
- Job cuts will primarily impact product development and customer support teams.
- Demand for AI-enabled PCs now exceeds 30% of HP's shipments.
- Rising memory chip prices pose potential risks to profitability for HP and competitors.
HP said on Tuesday that it anticipates reducing its global workforce by approximately 4,000 to 6,000 positions by 2028. This move is part of a strategy to streamline its operations and leverage AI to accelerate product development, enhance customer satisfaction, and increase productivity.
During a media briefing, CEO Enrique Lores said the job reductions will primarily affect teams involved in product development, internal operations, and customer support, CNN reported.
“We expect this initiative will create $1 billion in gross run rate savings over three years,” Lores added.
In February, the company had already laid off an additional 1,000 to 2,000 employees as part of a previously disclosed restructuring initiative.
“As we accelerate innovation across AI-powered devices to drive productivity, security and flexibility for our customers, our focus for FY26 is on disciplined execution,” Lores said.
The demand for AI-enabled PCs has surged, now accounting for over 30% of HP’s shipments for the fourth quarter ending October 31. However, analysts at Morgan Stanley warned that a global increase in memory chip prices, driven by higher demand from data centres, could raise costs and negatively impact profits for consumer electronics companies such as HP, Dell, and Acer.
“Looking forward, we are taking decisive actions to mitigate recent cost headwinds and are investing in AI-enabled initiatives to accelerate product innovation, improve customer satisfaction, and boost productivity,” Karen Parkhill, CFO, HP, said in a statement. “We are confident these actions will strengthen our foundation and position us for long-term growth.”
This announcement of layoffs coincided with the release of HP’s fiscal year 2025 financial results, which revealed a 3.2% year-over-year increase in revenue to $55.3 billion. The net revenue for the fourth quarter was $14.6 billion, marking a 4.2% rise and the sixth consecutive quarter of revenue growth for HP.
