Winning Bizness Desk
Mumbai.HP Inc has announced a major workforce reduction plan that will remove between 4,000 and 6,000 jobs worldwide by the end of fiscal year 2028. The company currently employs around 58,000 people. The decision comes as rising memory-chip prices and a shift toward more artificial intelligence-driven operations push the tech major into deeper restructuring. The firm expects the move to generate gross savings of about one billion dollars over three years. At the same time, the management says it is preparing itself for sharper competition in PC and printing markets that are changing rapidly.
Pressure From High Memory Costs
HP explained that the biggest trigger behind the move is the sudden rise in memory-chip prices, driven mainly by demand from data centres. Analysts at Morgan Stanley have already warned that companies like HP, Dell and Acer could face shrinking profits in the coming quarters. HP said the ongoing gains from the PC sales cycle are being neutralised by these increased component costs. While the impact may remain soft during the first half of the fiscal year because of inventory protection, the company expects tougher conditions in the second half.
- Memory chip shortages are pushing up manufacturing costs
- Analysts expect strong pressure on profit margins
- Rising demand for data-centre products is driving the price surge
Impact on Operations and Workforce
HP CEO Enrique Lores said the restructuring will hit product development, internal operations and customer-support teams most. The company had already let go of 1,000 to 2,000 employees earlier this year. Lores added that HP is increasing the number of memory suppliers, reducing memory use where it is not essential and accelerating problem-solving in critical areas. HP is also shifting manufacturing for North American products out of China to reduce tariff-related challenges and improve supply flexibility.
Recent Business Performance Trends
In the fiscal fourth quarter, HP recorded a 4.2 percent rise in sales, reaching 14.6 billion dollars. The PC division saw an 8 percent growth because of strong demand for Windows 11 devices and a sharp rise in AI-powered PCs. More than 30 percent of PC shipments during the quarter were AI-enabled. However, the printing business struggled, with revenue falling 4 percent to 4.27 billion dollars. Adjusted profit per share stood at 93 cents, slightly better than analyst expectations of 92 cents.
- AI-enabled PCs made up over 30 percent of Q4 shipments
- Printing revenue continues to decline despite stable demand
- Tariff issues are pushing manufacturing out of China
Layoffs in the Wider Tech Sector
HP’s decision adds to the wider global trend of job cuts across the technology sector. Amazon has cut more than 14,000 jobs recently, close to 10 percent of its corporate workforce. Reports say Amazon has eliminated nearly 30,000 corporate roles since the pandemic. Meta has also removed hundreds of AI-related positions, while Apple has shed dozens of employees as part of a sales-division reorganisation. HP had taken a similar step three years ago when it cut 6,000 jobs and saved about 2.2 billion dollars.
Future Outlook and Expected Challenges
Analysts believe HP will benefit from a billion-dollar saving over the next three years, but restructuring charges worth 650 million dollars will add short-term pressure. Of this, 250 million dollars will hit in FY26. The company expects full-year adjusted earnings between 2.90 and 3.20 dollars per share, slightly below analyst expectations. The management says guidance will remain cautious because of memory-price uncertainty, but actions will stay aggressive. HP expects AI innovation in PCs and customer-experience tools to help it stay competitive.
- Profit expectations remain lower than market estimates
- Workforce reduction may impact 7 to 10 percent of employees by 2028
