HP has unveiled an ambitious – and at the same time harsh – reorganization plan, stating that it will cut 4,000 to 6,000 jobs worldwide by fiscal year 2028. The move is part of the company's strategy to streamline its operations and more extensively integrate advanced artificial intelligence solutions , aiming to develop products faster, support customers more efficiently and substantially boost productivity.
Affected departments and savings targets
According to CEO Enrique Lores, the cuts will affect teams related to product development, internal operations and customer support. Lores explained during a media briefing that the initiative is expected to generate up to $1 billion over the next three years.
HP had already cut 1,000 to 2,000 jobs earlier this year as part of a restructuring program. The new move is clearly a continuation of a more aggressive restructuring strategyas competition intensifies and market pressures increase.
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The increased demand for AI PCs and the market challenges
Demand for AI-enabled PCs has been strong, with AI PCs now accounting for more than 30% of HP’s shipments in the fourth quarter of the fiscal year. Despite the upward trend, Morgan Stanley analysts warn that continued prices memory chip —which are directly related to the needs of data centers for AI—could negatively impact the margins of major manufacturers such as HP, Dell and Acer.
The rise of artificial intelligence has turned dynamic random access memory and NAND into a “golden” resource. Increasing competition for computing power in AI systems is driving up prices, which is a concern for companies that rely on a stable and economical supply chain.
When is the impact expected to be seen?
Lores explained that HP expects price increases to significantly impact financial results in the second half of fiscal year 2026. For the first half, the company appears protected, having secured sufficient inventories.
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However, to mitigate the pressure from increased costs, HP is implementing a series of "aggressive actions", including:
- selection of suppliers with lower costs,
- limitation on product memory configurations,
- price adjustment in selected markets.
The company also warned that adjusted earnings per share for fiscal year 2026 will range between $2.90 and $3.20 – lower than expected estimates of $3.33.
Forecasts for the immediate future and quarterly results
For the first quarter of the new fiscal year, HP is forecasting earnings of 73 to 81 cents per share; the average estimate falls short of analysts' forecasts of about 79 cents.
Despite the challenges, fourth-quarter revenue reached $14.64 billion, narrowly beating estimates of $14.48 billion, a sign that the company continues to maintain significant market share and solid demand in key product categories.
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HP's strategic shift: From hardware manufacturer to AI-first company
HP leadership emphasizes that the transition to a more agile, AI-driven structure is not just a market need, but a strategic choice for the company's long-term sustainability. AI is already redefining how new products are designed and tested, enabling faster development cycles and improved personalization.
At the same time, the integration of AI tools into customer service—such as automatic fault diagnostics and predictive maintenance—is expected to reduce operating costs, but also enhance the consumer experience.
A difficult but necessary transition
Mass layoffs and a digital transformation mark a time of major change for HP. While the numbers show the company is under pressure, its shift to artificial intelligence could be the key to its future. Whether this transition will yield long-term benefits or further strain the company's finances remains to be seen in the coming years — especially as competition in the AI PC market intensifies.
