HP to cut up to 6,000 jobs in restructuring

HP Inc. announced on Tuesday that it will cut between 4,000 and 6,000 employees through fiscal 2028, representing up to 10 per cent of its global workforce, as the company grapples with disappointing earnings projections and mounting pressure from artificial intelligence adoption.

HP’s announcement underscores a critical inflection point for HR leaders — widespread corporate restructuring is being driven not only by traditional cost pressures but increasingly by the accelerating integration of AI technologies across business operations.

The timing of HP's announcement is particularly significant given the broader economic climate. Sizable layoffs have continued to pile up, raising worker anxieties as companies navigate a personnel standstill amid wider economic uncertainty. HP joins an expanding list of major corporations announcing significant workforce reductions, transforming 2025 into a challenging year for workforce stability.

Financial pressures and market headwinds

The PC and printer maker's decision to restructure comes on the heels of disappointing financial guidance. HP issued a lower-than-expected earnings projection for the new fiscal year, with fiscal 2026 guidance falling below analyst expectations. The company's profit outlook of $2.90 to $3.20 per share missed the $3.33 analyst estimate, signaling operational challenges that demand immediate action.

A significant driver of HP's financial pressures stems from rising memory chip costs. Memory chip costs are jumping 30 cents per share due to AI hardware demand, creating unexpected headwinds that the company must address through aggressive cost-cutting measures, CEO Enrique Lores said in a conference call, according to media reports.

“We expect this initative will create $1 billion in gross run rate savings over three years,” said Lores.

Despite some revenue bright spots — PC sales increased 8 per cent to $10.4 billion while printer revenue fell four per cent to $4.3 billion, and overall revenue for the fourth quarter exceeded estimates — the company's overall outlook remains challenging.

AI as the restructuring catalyst

What distinguishes HP's restructuring from previous cost-cutting initiatives is the explicit connection to AI transformation. HP expects to streamline operations and adopt AI to speed up product development, improve customer satisfaction, and boost productivity, according to the company's official announcement. The company projects it will achieve gross savings of $1 billion annually by fiscal 2028 through these cuts.

Notably, this isn’t HP's first major restructuring. Three years ago, the company unveiled a different cost-cutting program also aimed at eliminating 4,000 to 6,000 jobs, which it said saved the company $2.2 billion. Additionally, the company laid off 2,000 employees in February as part of an earlier announced restructuring plan, as reported by the San Francisco Chronicle.

HP's announcement occurs within a broader context of significant layoffs across major technology and industrial companies. CNBC reported that General Motors laid off about 1,700 workers across manufacturing sites in Michigan and Ohio in late October, as the auto giant adjusts to slowing demand for electric vehicles. Meanwhile, Intel's CEO Lip-Bu Tan announced the company expected to end the year with 75,000 core workers through layoffs and attrition, down from 99,500 core employees at the year's end.

The tech sector has been particularly hard hit. Microsoft began laying off about 6,000 workers in May and later announced it would cut 9,000 positions, marking its biggest round of layoffs in more than two years.