HP to Cut up to 6,000 Jobs as AI Overhaul Collides With Rising Chip Costs

HP Inc has unveiled plans for a major shake-up, announcing that as many as 6,000 roles could be cut worldwide by fiscal 2028 as the business refocuses around artificial intelligence.

Management said the restructuring is intended to simplify operations and speed up product development, with teams in engineering, internal functions and customer support set to be affected. The shares slipped 5.5% in after-hours trade following the announcement.

Chief executive Enrique Lores told reporters the initiative should generate around US$1 billion in annualised savings over three years.

It follows a smaller round of layoffs earlier this year, when up to 2,000 jobs were removed under an earlier cost-cutting programme.

HP is leaning heavily into AI-enabled devices, which accounted for more than 30% of its PC shipments in the final quarter to 31 October.

However, rising memory chip prices threaten to squeeze margins across the sector.

Analysts warned that growing demand from data centres has pushed up the cost of both DRAM and NAND, raising the pressure on manufacturers such as HP, Dell and Acer.

Lores said the company expects the hit to feed through in the second half of fiscal 2026, though current inventory should cover the first half. HP is working with lower-cost suppliers, trimming memory specifications and adjusting prices to offset the impact.

The group forecast adjusted earnings of US$2.90 to US$3.20 a share for fiscal 2026, below market expectations. First-quarter guidance also came in soft. Even so, fourth-quarter revenue of US$14.64 billion marginally beat forecasts.