Computer and printer manufacturer HP announced plans to cut between 4,000 and 6,000 jobs globally by the end of fiscal year 2028, representing up to a 10% reduction in its workforce. The company stated that the layoffs are part of its efforts to streamline operations and integrate artificial intelligence (AI) to accelerate product development, enhance customer satisfaction, and boost productivity.
HP estimates that the restructuring will save at least $1 billion in annual operating costs. However, the job cuts will incur approximately $650 million in restructuring charges, with about $250 million allocated for fiscal year 2026, which began on November 1.
CEO Enrique Lores emphasized the strategic importance of AI adoption during an earnings call, stating, "Looking ahead, we see significant opportunities to integrate AI into HP to drive innovation, improve customer satisfaction, and enhance productivity." He added, "This is a necessary step to ensure the company remains competitive."
As of October last year, HP employed 58,000 people, meaning the layoffs could exceed 10% of its workforce. The company previously conducted a similar-scale restructuring in 2022, which resulted in $2.2 billion in savings.
The announcement coincided with HP's latest quarterly earnings report, which showed modest performance. In Q4 (ending October 31), revenue rose 4% year-over-year to $14.6 billion, slightly above analyst expectations of $14.5 billion. Net income reached $795 million ($0.84 per share), up from $763 million ($0.80 per share) a year earlier.
By segment, the Personal Systems division (including desktops and laptops) posted an 8% revenue increase to $10.35 billion, while the Printing division saw a 4% decline to $4.27 billion. Lores attributed PC sales growth to strong demand driven by the end of Windows 10 support but projected a 6.6% shipment increase in 2025 followed by a 2.2% drop in 2026 as upgrade momentum fades.
According to research firm Omdia, global PC shipments grew 6.8% YoY in Q3 2025 to 72 million units. HP ranked second with 15 million units shipped (up 11%), trailing Lenovo's 19.4 million (up 17%).
Excluding restructuring costs, HP forecasts full-year adjusted EPS between $2.90 and $3.20, below the $3.32 consensus. For Q1 (ending January), it expects adjusted EPS of $0.73–$0.81, missing the $0.78 estimate. Analysts cite rising memory chip costs as a key headwind, offsetting benefits from the PC market recovery.
Morgan Stanley warned that surging memory prices due to data center demand may pressure margins for HP, Dell, and Acer. Lores outlined mitigation strategies, including diversifying chip suppliers, reducing memory configurations where possible, and adjusting product pricing.
Following the earnings release on November 25, HP shares fell 5.5% in after-hours trading after closing up 2%. The stock has declined 16.73% year-to-date.