HP to lay off 6,000 in global AI overhaul, product and support teams on chopping block

HP Inc. will slash up to 6,000 jobs globally by 2028 as it doubles down on artificial intelligence to streamline operations and cut costs.

The move is part of a sweeping push to automate operations, speed up product development, and improve customer support through artificial intelligence.

CEO Enrique Lores said the cuts will affect teams in product development, internal operations, and customer support. “We expect this initiative will create $1 billion in gross run rate savings over three years,” Lores told reporters.

Shares of the Palo Alto-based tech company dropped 5.5% in after-hours trading following the announcement.

The move builds on an earlier round of cuts in February, when HP laid off 1,000 to 2,000 workers under an ongoing restructuring plan. The company is also contending with rising component costs, driven by increased demand for AI infrastructure.

Morgan Stanley analysts warned that a global spike in memory chip prices—especially dynamic random access memory (DRAM) and NAND—could squeeze profits for PC makers like HP, Dell, and Acer. Lores noted HP is bracing for higher costs in the second half of fiscal 2026, though the company has stockpiled enough inventory to weather the first half.

“We are taking a prudent approach to our guide for the second half, while at the same time implementing aggressive actions like qualifying lower-cost suppliers, reducing memory configurations and taking price actions,” Lores said.

HP forecasted a fiscal 2026 adjusted profit per share between $2.90 and $3.20—well below Wall Street's average estimate of $3.33, according to LSEG data. Its adjusted Q1 profit outlook ranged between 73 and 81 cents per share, with the midpoint slightly under analyst expectations.

Still, HP beat revenue expectations in Q4, posting $14.64 billion compared to the forecasted $14.48 billion.