HP to Cut Up to 6,000 Jobs as AI Reshapes Operations; Apple Restructures Its Sales Teams
HP to Cut Up to 6,000 Jobs as AI Reshapes Operations; Apple Restructures Its Sales Teams
HP Inc. has revealed plans to reduce its global workforce by 4,000 to 6,000 employees by fiscal year 2028, signaling a strategic shift toward integrating artificial intelligence across its operations. The company says the move is aimed at streamlining workflows, accelerating product development, enhancing customer experience, and boosting overall productivity.
Following the announcement, HP’s shares dropped 5.5% in after-hours trading.
During a media briefing, CEO Enrique Lores clarified that employees in product development, internal operations, and customer support functions will be most affected by the layoffs. He emphasized that the initiative is expected to generate approximately $1 billion in gross run-rate savings over the next three years.
This announcement comes on the heels of earlier restructuring measures in February, when HP reduced its workforce by an additional 1,000 to 2,000 staff members.
HP’s focus on AI-enabled devices appears to be paying off, with over 30% of its PC shipments in the fourth quarter ending October 31 featuring AI capabilities. However, the company faces challenges from rising global memory chip prices, driven by heightened demand from data centers and the ongoing race among major tech firms to expand AI infrastructure. Analysts at Morgan Stanley caution that higher DRAM and NAND memory costs could squeeze margins for consumer electronics companies, including HP, Dell, and Acer.
Lores noted that HP expects the financial impact of these rising chip prices to materialize in the second half of fiscal 2026. In the meantime, the company has sufficient inventory to navigate the first half of the year. To mitigate cost pressures, HP is pursuing measures such as qualifying lower-cost suppliers, reducing memory configurations in certain products, and adjusting pricing strategies.
Looking ahead, HP projects its adjusted earnings per share (EPS) for fiscal 2026 to range between $2.90 and $3.20, falling short of analysts’ consensus estimate of $3.33. For the first quarter, the company anticipates adjusted EPS between $0.73 and $0.81, with the midpoint slightly below the expected $0.79. The company reported fourth-quarter revenue of $14.64 billion, marginally exceeding expectations of $14.48 billion.
The tech sector has seen widespread workforce reductions in recent weeks, with major players like Apple also restructuring. On the same day HP announced its layoffs, Apple confirmed the elimination of numerous sales roles as part of an effort to streamline its offerings for business, education, and government clients. The cuts targeted account managers and personnel responsible for Apple’s briefing centers used for institutional meetings and product demonstrations.
While Apple did not disclose the total number of affected employees, the company stated that impacted staff could apply for other roles within the organization. These cuts follow recent reductions in Australia and New Zealand, where approximately 20 positions were removed from Apple’s local teams.
