HP Inc has announced a significant workforce reduction plan that will eliminate between 4,000 and 6,000 positions globally by the end of fiscal year 2028. The technology giant made the announcement on November 26, 2025, during its fiscal fourth-quarter earnings call, citing artificial intelligence adoption as the primary driver behind the strategic restructuring.
The Palo Alto-based PC and printer manufacturer expects the HP Restructuring initiative to generate approximately $1 billion in gross annual savings by fiscal 2028. CEO Enrique Lores emphasized that the cuts represent a fundamental shift in how the company operates, with AI tools being deployed across product development, customer support, sales, and manufacturing functions.
HP Restructuring Targets Multiple Business Units
According to Lores, the workforce reduction will impact teams across various segments including product development, internal operations, customer support, and administrative functions. The company plans to implement advanced automation systems that will consolidate roles and enable operations with fewer employees. This represents approximately 10 percent of HP’s current workforce, which stood at around 58,000 employees as of October 2024.
The restructuring costs are estimated at $650 million, with $250 million expected to be incurred in fiscal 2026, which began November 1, 2025. This latest round of cuts follows an earlier reduction announced in February 2025, when HP eliminated an additional 1,000 to 2,000 positions under a separate restructuring plan.
AI-Enabled PCs Drive Revenue Growth Amid Challenges
Despite the workforce reduction, HP reported strong performance in its personal systems segment during the fourth quarter ended October 31, 2025. The division generated $10.35 billion in revenue, representing an 8 percent year-over-year increase and exceeding analyst expectations of $10.15 billion.
A notable highlight was the surge in AI-enabled PC shipments, which accounted for more than 30 percent of total PC units shipped in the quarter. This represents a significant doubling of AI PC revenue compared to the previous year, signaling growing consumer adoption of artificial intelligence-powered computing devices.
However, the company faces mounting pressure from rising memory chip costs. Memory components currently represent 15 to 18 percent of typical PC costs, and prices have accelerated in recent weeks due to surging demand from data centers building AI infrastructure. Morgan Stanley analysts have warned that this trend could squeeze profit margins at consumer electronics manufacturers including HP, Dell, and Acer.
Financial Outlook Reflects Cautious Stance
For fiscal 2026, HP issued adjusted earnings per share guidance of $2.90 to $3.20, falling short of the analyst consensus estimate of $3.33. The company also projected first-quarter adjusted EPS between 73 and 81 cents, with the midpoint below the 79-cent estimate.
Lores acknowledged the cost pressures, stating that HP expects to feel the impact in the second half of fiscal 2026. The company is implementing aggressive countermeasures including qualifying lower-cost suppliers, reducing memory configurations, and implementing strategic price increases where necessary.
HP Restructuring Aligns with Industry-Wide Trend
The announcement places HP among numerous technology companies citing AI adoption as justification for workforce reductions. According to Layoffs.FYI, more than 114,000 technology sector jobs were eliminated across 237 companies in 2025 alone. In October 2025, Amazon announced it would cut approximately 14,000 administrative positions, pointing to organizational changes driven by artificial intelligence.
CFO Karen Parkhill emphasized during the earnings call that HP sees “a significant opportunity ahead to embed AI into almost all that we do to improve productivity, accelerate innovation and improve customer experiences.” The company has been piloting AI implementations for two years, focusing on process redesign and what Lores described as “agentic AI” to drive efficiency gains.
For the full fiscal year 2025, HP reported total revenue of $55.3 billion, up 3.2 percent from the prior year. However, GAAP diluted earnings per share fell to $2.65, down 5.7 percent from 2024, reflecting the challenging operating environment.
