Massive Layoff: HP Plans To Cut Up to 6,000 Jobs, Yet Its High-Stakes $1 Billion AI Bet Sparks Even Bigger Questions About What Comes Next

Massive Layoff: HP Inc. has announced that it will lay off 4,000 to 6,000 employees worldwide by the end of fiscal year 2028. The company says this decision is part of its plan to reorganize operations and increase the use of Artificial Intelligence (AI). HP aims to use AI to speed up product development, improve customer satisfaction and increase overall productivity.

Teams That Will Be Affected

According to HP’s CEO Enrique Lores, the layoffs will mainly affect teams connected to product development, internal operations and customer support. Lores explained that the company expects to save 1 billion dollars over the next three years through this initiative.

Earlier in February, HP had already announced a restructuring plan under which 1,000 to 2,000 employees were laid off. At the same time, the demand for AI-based personal computers has increased rapidly. In the fourth quarter, more than 30% of HP’s total PC shipments were AI-enabled devices.

Rising Memory Chip Prices: A New Challenge

There is also concern about the rising global prices of memory chips. Analysts from Morgan Stanley have warned that because of the growing demand from data centers, the prices of memory chips may rise even more. This may put pressure on the profits of companies like HP, Dell and Acer.

Due to competition among big tech companies to build advanced AI infrastructure, the prices of DRAM and NAND chips have already increased.

Impact Expected in Fiscal 2026

Enrique Lores said that the impact of these higher chip prices will be felt in the second half of fiscal 2026. For the first half, HP already has enough inventory. The company is now taking a careful approach for the second half by choosing low-cost suppliers, reducing memory configurations, and taking pricing actions to manage costs.

HP’s Profit Outlook

For fiscal 2026, HP has estimated its adjusted profit per share to be between USD 2.90 and USD 3.20, which is lower than analysts’ estimate of USD 3.33.

For the first quarter, HP expects adjusted earnings of 73 to 81 cents per share.

In the fourth quarter, HP recorded $14.64 billion in revenue, which is higher than the expected $14.48 billion.