HP to Lay off 6,000 Employees in Major AI-Driven Restructuring

‍

HP announced plans to eliminate between 4,000 and 6,000 jobs globally by the end of fiscal year 2028. 

For a company with 58,000 employees worldwide, this means cutting up to 10% of its workforce as artificial intelligence reshapes the future of work.

HP officially stated it in their official press release for fourth quarter results:

“HP Inc. announced a company-wide initiative (“fiscal 2026 plan”) to drive customer satisfaction, product innovation, and productivity through artificial intelligence adoption and enablement. The company estimates that these actions will result in gross run rate savings of approximately $1 billion by the end of fiscal 2028. … The company expects to reduce gross global headcount by approximately 4,000-6,000 employees. These actions are expected to be completed by the end of fiscal 2028.”

CEO Enrique Lores said that the company is going all-in on AI, and it needs to restructure to make that happen. He added that moving toward AI-driven operations will enable faster product development and greater productivity.

What was the reason behind these cuts?

HP expects gross savings of $1 billion annually as a result of the job cuts. 

These savings will come from applying agentic AI to some specific departments. The job cuts will primarily hit three areas: 

• product development teams
• internal operations staff
• customer support workers

These are precisely the departments where AI tools are becoming sophisticated enough to handle work. The company hopes this will improve productivity and speed up innovation.

Lores explained this cuts and their AI strategy in the earning call:

“ Two years ago, we started to do some pilots on how AI could help us to drive these things. … And once the process once we know how the process could be redone, using AI, using agentic AI can really have a very significant impact. And this is why we think that really over the next few years, this can have a very significant impact across areas I mentioned before, faster product development, customer satisfaction, and also productivity. And we have quantified productivity around $1 billion over the next three years."

‍

HP announced a similarly sized round of layoffs in 2022. At that time, it was part of their Future Ready Transformation plan to result in annualized gross run rate savings of $1.4 billion or more in the next three years.

Earlier this year, HP laid off an additional 1,000 to 2,000 employees as part of their restructuring plan.

According to their CEO, HP is caught in between rising costs and stagnant demand.

Memory costs are currently 15 to 18% of the cost of a typical PC, and while an increase was expected, its rate has accelerated in the last few weeks. Memory chip prices have skyrocketed due to the AI boom. When companies like Microsoft, Google, and Amazon need massive amounts of memory to train AI models, it drives up prices for everyone else.

Adding to HP's headaches, the company's financial outlook reflects the added cost driven by the current U.S. trade-related regulations in place.

Even HP’s revenue is growing slowly. For the full fiscal year 2025, net revenue of $55.3 billion was up only 3.2% from the previous year.

Bottom Line

Thousands of HP employees who will lose their jobs in next 3 years. While the cuts will roll out gradually through 2028, the uncertainty creates stress for workers wondering whether their position will survive.

As AI becomes more capable, companies are betting they can do more with fewer people. HP's approach mirrors what's happening across the tech sector, where companies are systematically eliminating traditional roles.

However, this has once again renewed public debate suggesting that these layoffs may be linked to increased outsourcing or H-1B visa–based hiring behind the scenes.