HP to slash up to 6,000 jobs — latest tech company to pivot to AI

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HP announced on Tuesday its plans to cut between 4,000 and 6,000 jobs globally by fiscal 2028. This move is part of a strategy to streamline operations and incorporate artificial intelligence to accelerate product development, enhance customer satisfaction, and increase productivity.

Following the announcement, shares of the Palo Alto-based company dropped more than 5% in extended trading.

CEO Enrique Lores revealed during a media briefing call that the job cuts will affect HP’s teams dedicated to product development, internal operations, and customer support. The layoffs could potentially impact up to 10% of the workforce.

The company laid off an additional 1,000 to 2,000 employees in February, as part of a previously announced restructuring plan. AFP via Getty Images

“We expect this initiative will generate $1 billion in gross run rate savings over three years,” Lores stated.

HP had previously laid off 1,000 to 2,000 employees in February as part of a restructuring plan.

The demand for AI-enabled PCs has been steadily increasing, accounting for over 30% of HP’s shipments in the fourth quarter ending October 31.

Analysts from Morgan Stanley cautioned that a surge in global memory chip prices due to heightened data center demand could lead to cost escalation and profit pressure for consumer electronics manufacturers like HP, Dell, and Acer.

Price hikes for dynamic random access memory and NAND memory chips, driven by Big Tech’s AI infrastructure expansion, have intensified competition in the server market.