HP to cut up to 6000 jobs in an AI-led long-term restructuring plan

HP has announced plans to reduce its global workforce by 4,000 to 6,000 employees, representing almost 10 percent of its workforce, as part of a long-term restructuring initiative that extends through fiscal 2028. These layoffs coincide with disappointing forecasts for the upcoming fiscal year and increased costs stemming from US trade regulations and surging memory prices.

The company posted a 4 percent increase in quarterly revenue to $14.65 billion, while net income rose modestly to $795 million. However, its outlook fell short of Wall Street expectations.

HP announced a company-wide "fiscal 2026 plan" focused on AI-driven improvements in customer satisfaction, innovation, and productivity. The initiative aims to cut 4,000–6,000 jobs and deliver $1 billion in annual savings by fiscal 2028, while incurring about $650 million in restructuring and related costs.

CEO Enrique Lores said during a media briefing that teams involved in product development, internal operations, and customer support are expected to be affected.

“Today, 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 estimates that it will incur approximately $650 million in labor and non-labor costs related to restructuring and other charges, with approximately $250 million in fiscal 2026. 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,” HP said in a press announcement.

HP’s fiscal 2026 plan includes HP’s efforts to drive customer satisfaction, product innovation, and productivity through AI adoption and enablement, and cost savings associated with the fiscal 2026 plan represent gross reductions in costs from these restructuring plans.

According to the company, these structural cost savings represent gross reductions in costs driven by operational efficiency, digital transformation, and portfolio optimisation. These initiatives include, but are not limited to, workforce reductions, platform simplification, program consolidation, and productivity measures undertaken by HP, which HP expects will be sustainable in the longer term.

The company also stated that these structural cost savings are net of any new recurring costs resulting from these initiatives and exclude one-time investments to generate them. HP’s expectations for the longer-term sustainability of such structural cost savings are based on its current business operations and market dynamics and could be significantly impacted by various factors, including, but not limited to, HP’s evolving business models, future investment decisions, market environment, and technology landscape.

Earlier this year, HP laid off 1,000 to 2,000 employees as part of a previously announced restructuring plan.

Global technology companies have spent much of the year cutting costs, slowing hiring, and restructuring teams. Apple, which has largely held off from similar moves, has now joined the list with targeted reductions.

A Reuters report said Apple is trimming roles across its sales division as part of a broader effort to improve customer engagement. The company stressed that only a limited number of employees are affected and that it continues to hire in other areas. Impacted staff, it added, will be able to apply for new roles within the organisation.