In a significant move to boost competitiveness, global technology giant HP Inc. has unveiled a major restructuring plan that will eliminate between 4,000 and 6,000 jobs by fiscal year 2028. The company aims to achieve annual gross savings of $1 billion through this initiative, primarily by implementing artificial intelligence across its operations.
Massive Workforce Reduction and AI Integration
The job cuts represent a substantial portion of HP's workforce, which stood at approximately 58,000 employees as of October 2024. This marks the second major restructuring in three years for the PC and printer manufacturer, which previously eliminated a similar number of positions between 2022 and 2025.
According to Chief Executive Officer Enrique Lores, the company will deploy AI tools across multiple business areas including product development, customer support, sales, and manufacturing. "It's something we have to do to make sure the company stays competitive," Lores emphasized in an interview.
The restructuring will incur approximately $650 million in charges, with about $250 million of this amount hitting the company's books in fiscal 2026, which began on November 1, 2025.
Financial Performance and Market Challenges
HP's profit outlook for the current year fell short of analyst expectations. The company projected profit, excluding restructuring charges, to range between $2.90 to $3.20 per share, below the average analyst estimate of $3.32 per share.
For the quarter ending in January 2026, HP expects earnings per share, excluding items, to be between 73 to 81 cents, compared to analyst estimates of 78 cents.
The company attributed the weaker outlook to rising memory chip costs that are impacting the benefits of the current PC sales cycle. While HP has sufficient inventory to cushion the impact in the first half of the year, the company is taking "aggressive actions" for the second half, including bringing on more memory suppliers, optimizing memory usage in products, and implementing price increases where necessary.
Fourth Quarter Results and Market Reaction
Despite the challenging outlook, HP reported positive results for its fiscal fourth quarter ended October 31, 2025. Sales increased by 4.2% to $14.6 billion, slightly exceeding analyst projections of $14.5 billion.
The company's PC unit showed strong performance with revenue growth of 8%, driven by customers upgrading to Windows 11 machines and growing interest in AI PCs featuring special chips. However, the printer business experienced a 4% decline in sales to $4.27 billion, matching market expectations.
Profit, excluding some items, reached 93 cents per share, beating the average analyst estimate of 92 cents. Despite this positive performance, HP shares declined approximately 4% in extended trading following the announcement, adding to the stock's 25% decline earlier this year before the results were released.
The company continues its strategic shift of manufacturing facilities outside China for products sold in North America to mitigate tariff impacts, while navigating the current challenges in the memory chip market.
