**HP Inc. Plans Major Job Cuts Amid AI Integration Strategy**
HP Inc. announced on Tuesday its intention to reduce its global workforce by 4,000 to 6,000 jobs by fiscal 2028, aligning with a trend among tech companies to enhance their use of artificial intelligence tools. The layoffs are part of a strategy to streamline operations and incorporate AI into various workflows, aiming to accelerate product development, enhance customer satisfaction, and increase productivity. CEO Enrique Lores highlighted that teams involved in product development, internal operations, and customer support will be most affected by these job cuts. He stated, “We expect this initiative will create $1 billion in gross run rate savings over three years,” as reported by Reuters.
This announcement follows a previous round of layoffs in February, where HP let go of 1,000 to 2,000 employees as part of an earlier restructuring effort.
**Rising Demand for AI-Enabled PCs**
There is a growing consumer interest in personal computers equipped with specialized AI chips, which accounted for over 30% of HP’s shipments in the fourth quarter ending October 31, according to Reuters. However, the increasing demand for these chips has led to a rise in memory chip prices, driven by heightened demand from data centers. Analysts from Morgan Stanley have warned that this surge could impact the profitability of consumer electronics manufacturers, including HP, Dell, and Acer. The competition in the server market has also contributed to price increases for dynamic random access memory (DRAM) and NAND chips.
Lores mentioned that HP anticipates feeling the effects of these higher prices in the second half of fiscal 2026, although the company currently has enough inventory to manage the first half. “We are taking a prudent approach to our guide for the second half, while at the same time implementing aggressive actions like qualifying lower-cost suppliers, reducing memory configurations, and taking price actions,” he added.
In response to the challenges posed by tariffs imposed during the Trump administration, HP has been working to reduce expenses and relocate production outside of China for most products destined for North America.
**HP’s Financial Outlook**
Following the announcement, HP’s shares fell approximately 4% in after-hours trading, closing at $24.32 on Tuesday. The stock had already seen a 25% decline this year prior to the announcement. The company projects its adjusted profit per share for fiscal 2026 to be between $2.90 and $3.20, which is below the analysts’ average estimate of $3.33, according to data compiled by LSEG.
HP reported a revenue of $14.64 billion for the fourth quarter, surpassing analysts’ expectations of $14.48 billion. The company’s PC unit revenue increased by 8%, driven primarily by demand from customers seeking enhanced performance.
**Conclusion**
As HP Inc. navigates the challenges of integrating AI into its operations while managing rising costs, the company’s strategic decisions will be crucial in shaping its future performance and market position.
**FAQ**
**What is HP’s plan regarding job cuts and AI integration?**
HP plans to cut 4,000 to 6,000 jobs globally by fiscal 2028 to streamline operations and enhance the integration of AI tools across its workflows.
