HP said it expects to cut between 4,000 and 6,000 jobs globally by fiscal 2028 as part of a plan to streamline operations and adopt artificial intelligence to speed product development, improve customer satisfaction and increase productivity.
Shares of the Palo Alto, California-based company fell 5.5% in extended trading.
HP teams focused on product development, internal operations and customer support will be affected by the cuts, CEO Enrique Lores said during a press briefing at a press conference.
“We expect this initiative to generate $1 billion in gross execution speed savings over three years,” Lores added.
The company laid off an additional 1,000 to 2,000 employees in February as part of a previously announced restructuring plan.
Demand for AI-enabled PCs has continued to increase externally, reaching more than 30% of HP’s shipments in the fourth quarter ended October 31.
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A global rise in the price of memory chips driven by growing data center demand could raise costs and pressure profits at consumer electronics makers such as HP and Dell.
Big Tech’s push to develop AI infrastructure has led to price hikes for dynamic random access memory and NAND — two types of commonly used memory chips — amid stiff competition in the server market.
Lores noted that HP expects to feel the impact in the second half of fiscal 2026, with higher price increases. HP has enough inventory for the first half.
“We are taking a cautious approach to our guidance for the second half, while implementing aggressive actions such as qualifying lower-cost suppliers, reducing memory configurations and taking pricing actions,” Lores said.
The company expects fiscal 2026 adjusted earnings per share between $2.90 and $3.20, below analysts’ median estimate of $3.33, according to data compiled by LSEG.
HP expects first-quarter adjusted earnings per share between 73 cents and 81 cents, with the midpoint below estimates of 79 cents apiece.
Fourth-quarter revenue was $14.64 billion, beating estimates of $14.48 billion.
With information from Reuters
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