Article contents:
- Introduction: a radical transformation at HP
- Details of the restructuring plan and affected jobs
- The role of artificial intelligence in the new strategy
- Financial savings and future spending
- Market challenges and rising chip prices
- Frequently asked questions
Introduction: a radical transformation at HP
HP Inc, a leading manufacturer of computers and printers, has announced ambitious and difficult plans at the same time. The company expects to cut its global workforce by between 4,000 and 6,000 positions by fiscal year 2028. This decision comes as part of a broad strategy aimed at streamlining internal operations and relying heavily on artificial intelligence technologies to drive future growth.
The stated goal of this move is to accelerate product development, improve customer satisfaction, and increase the company’s overall productivity. This shift reflects the prevailing trend in the technology sector, where companies seek to leverage artificial intelligence capabilities to automate tasks and improve efficiency, even if at the expense of the human workforce.
Details of the restructuring plan and affected jobs
HP CEO Enrique Lores explained during a press conference that the job cuts will primarily affect teams focused on product development, internal operations, and customer support. These departments are areas where the company sees artificial intelligence playing a pivotal role in improving efficiency and reducing the need for human intervention in certain tasks.
It is worth noting that this is not the first round of layoffs at HP. The company already laid off between 1,000 and 2,000 additional employees last February as part of a previously announced restructuring plan. The new announcement shows that the transformation process will be long-term and ongoing through 2028.
The role of artificial intelligence in the new strategy
Artificial intelligence is at the heart of HP’s new strategy. This is not limited to using artificial intelligence internally to improve operations, but extends to the products offered by the company as well. Demand for AI-powered personal computers (AI PCs) is seeing steady growth. According to company data, these devices accounted for over 30% of HP’s shipments in the fourth quarter ending October 31.
This trend reflects the company’s realization that the future of personal computing is tied to artificial intelligence capabilities embedded directly in devices, providing new and enhanced user experiences for both consumers and businesses. Investing in the development of these products requires reallocating resources, which partly explains the restructuring plans.
Financial savings and future spending
Enrique Lores expects the restructuring and job cut initiative to generate significant savings for the company. He stated, “We expect this initiative to generate $1 billion in gross run-rate savings over three years.” These savings will give the company greater financial flexibility to invest in key growth areas, led by artificial intelligence and advanced software.
However, the company’s future earnings outlook appears cautious. HP expects adjusted earnings per share for fiscal year 2026 to range between $2.90 and $3.20, below the average analyst estimate of $3.33, according to LSEG data. This caution may reflect initial costs associated with restructuring and ongoing market challenges.
Market challenges and rising chip prices
HP, like other consumer electronics manufacturers such as Dell and Acer, faces a major challenge in the form of the global rise in memory chip prices. This increase stems from rising demand from data centers supporting artificial intelligence infrastructure. Morgan Stanley analysts have warned that this could lead to increased costs and pressure on profit margins.
The push by major technology companies to build artificial intelligence infrastructure has driven up prices for dynamic random-access memory (DRAM) and NAND memory, two common types of memory chips. Lores noted that HP expects to feel the impact of these increases in the second half of fiscal year 2026. The company has sufficient inventory for the first half, but is taking a cautious approach for the second.
Lores explained that the company is taking proactive measures such as qualifying lower-cost suppliers, reducing memory configurations in certain devices, and taking pricing actions to counter these challenges and maintain profit margins.
Frequently asked questions
1. When will the layoffs at HP be completed?
The process is expected to be completed by the end of fiscal year 2028.
2. What is the main reason behind the job cuts?
The main reason is a plan to streamline operations and integrate artificial intelligence to increase efficiency and productivity.
3. How will rising memory chip prices affect consumers?
This could lead to higher prices for personal computers in the future, especially in the second half of 2026 and beyond.
