HP will reduce 4,000 to 6,000 jobs worldwide by fiscal 2028 under a major restructuring linked to artificial intelligence.
The company says the cuts will streamline operations and accelerate product development amid rising memory-chip costs that pressure consumer electronics profits.
Shares dropped 5.5 percent following the announcement.
The announcement, made on Tuesday, marks one of the company’s biggest workforce reshaping their efforts in years.
The Palo Alto-based computer and printer maker said the job cuts are part of a broader effort to streamline operations and embed AI deeper into product development, customer support and internal functions.
According to the company, the initiative is designed to speed up product development, improve customer satisfaction and boost productivity, signalling a significant shift in how HP plans to operate in the coming years.
CEO Enrique Lores, speaking during a media briefing call, said the restructuring will deliver major cost efficiencies.
“We expect this initiative will create Sh129.65 billion in gross run rate savings over three years,” he told media.
The savings, he added, will be essential as the company navigates rising costs and fast-changing competitive pressures driven by AI adoption across the global tech sector.
HP confirmed that teams working in product development, internal operations and customer support will be directly affected by the job cuts, though it did not specify the geographic distribution of the layoffs.
The restructuring extends earlier actions, the company laid off an additional 1,000 to 2,000 employees in February as part of a previously announced internal overhaul.
The company’s accelerated shift toward AI-enabled personal computers appears to be a major driver of the restructuring.
Demand for devices powered by artificial intelligence has surged, with HP reporting that such machines accounted for over 30 per cent of its total shipments in the fourth quarter ended October 31.
The strong external demand, HP said, reaffirms both the opportunity and the urgency of redesigning its operations around AI-supported growth.
However, the industry landscape brings new challenges. Analysts have warned that a global surge in memory-chip prices, driven largely by rising demand from data-centre operators, could squeeze margins for consumer electronics manufacturers.
As HP looks to absorb restructuring costs while investing in new AI capabilities, such pressures pose a risk to profitability.
According to Morgan Stanley analysts, the spike in chip prices could push up costs and pressure profits at consumer electronics makers such as HP, Dell and Acer.
Even so, HP executives insist the restructuring is a proactive step that positions the company for long-term competitiveness.
By reducing layers, integrating AI tools, and refocusing teams around high-growth technologies, the company expects to strengthen its innovation pipeline while tightening operational efficiency.
Lores repeated during the briefing that the plan is designed to ensure HP remains resilient amid shifting market conditions and a rapidly accelerating AI race across the tech industry.
The job cuts, spread out through fiscal 2028, represent roughly 10 per cent of the company’s global workforce based on recent staffing estimates.
While the company did not specify the timeline of the layoffs, it emphasised that the initiative is phased to support ongoing strategic adjustments and ensure continuity for customers and partners.
As HP moves forward with its restructuring, investors and employees alike will closely watch how the company balances cost-cutting with innovation.
For now, the company maintains that its bold shift toward AI-driven operations is essential to sustaining growth, even as tens of thousands of workers brace for the impact of HP’s largest workforce reductions in years.
