HP is gearing up for one of its most significant organisational shake-ups in years, unveiling a plan to eliminate 4,000 to 6,000 roles worldwide by fiscal 2028. The restructuring is part of a broad efficiency drive aimed at reshaping the company for a market increasingly defined by artificial intelligence. CEO Enrique Lores said the decision is crucial to ensure HP remains competitive, though investors reacted sharply — the company’s stock fell 5.5 per cent in after-hours trading.

Below are the five major takeaways from HP’s new strategy:

1. HP Leans on AI to Cut Costs and Speed Up Operations

The company is targeting annual savings of $1 billion by 2028 by rolling out AI systems across multiple business functions. According to Lores, AI-powered tools will streamline product engineering, sales processes, support channels and factory workflows.

He stressed that the overhaul is not merely a response to current economic pressures but part of a long-term blueprint to safeguard HP’s relevance as emerging technologies reshape the industry.

2. Job Cuts to Hit Product, Operations and Support Teams

The workforce reduction will primarily impact employees working in product creation, internal corporate functions and customer-facing support services. “This programme is expected to deliver $1 billion in gross run rate savings over the next three years,” Lores said.

HP has already gone through smaller rounds of layoffs earlier this year, cutting between 1,000 and 2,000 jobs. The latest announcement, however, signals a more determined move toward embedding automation into its core operations.

3. Strong Momentum for AI-Enabled PCs

Despite the looming layoffs, HP says it is seeing strong traction in its AI-driven PC portfolio. The company reported that more than 30 per cent of its laptop shipments in the quarter ending October 31 were devices capable of running local AI applications.

These AI-powered computers are expected to become a central growth pillar as users look for machines that can perform advanced tasks without depending on cloud processing.

4. Rising Memory Prices Could Hurt Margins

While AI is helping the company cut costs on one end, HP faces a new threat from soaring memory component prices. Analysts at Morgan Stanley warned that DRAM and NAND chips — essential for modern PCs and servers — are getting costlier due to surging AI infrastructure demand.

Lores said HP expects these pricing pressures to hit its margins in the latter half of fiscal 2026, although the company has sufficient inventory to cushion the near-term impact.

To mitigate rising expenses, HP plans to diversify suppliers, lower memory configurations where feasible and adjust product pricing.

5. HP Lowers Profit Guidance as Uncertainty Grows

Reflecting its cautious outlook, HP projected adjusted earnings of $2.90 to $3.20 per share for fiscal 2026, falling short of analysts’ expectations of $3.33. Its first-quarter guidance — 73 to 81 cents a share — also came in below Wall Street forecasts.

HP now joins a growing list of major technology companies retooling their organisations as AI accelerates. Amazon recently confirmed more than 14,000 job cuts, with nearly 40 per cent affecting engineering teams, while Apple has trimmed small segments of its sales workforce to sharpen customer engagement.

HP’s restructuring underscores the dual nature of the AI era — offering powerful tools for efficiency and innovation, while also triggering deep organisational shifts that displace thousands of workers.