HP Announces Major 6000 Workforce Reduction Following Apple's Layoff Announcement

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Tech giants continue AI-driven restructuring as HP plans to cut up to 6,000 jobs by 2028.

In a week marked by significant workforce reductions across Silicon Valley, HP Inc. announced Tuesday it will eliminate between 4,000 and 6,000 positions globally by fiscal year 2028, joining Apple in a concerning trend of major tech layoffs driven by artificial intelligence transformation.

The cuts, representing approximately 12 to 15 percent of HP's global workforce, come as the computing giant pivots toward AI-enabled products and streamlined operations. The announcement follows Apple's disclosure earlier this week that it would cut "dozens" of roles in its global sales division, though on a considerably smaller scale than HP's planned reductions.

Strategic Shift Toward AI

HP CEO Enrique Lores stated the initiative is expected to generate $1 billion in annual savings over three years, with restructuring charges estimated at approximately $650 million. The layoffs will primarily affect teams focused on product development, internal operations, and customer support, according to Lores during a media briefing call.

"HP's strategy to lead the Future of Work continues to deliver strong performance, marked by our sixth consecutive quarter of revenue growth," Lores said in the company's earnings announcement. "As we accelerate innovation across AI-powered devices to drive productivity, security and flexibility for our customers, our focus for FY26 is on disciplined execution," he added.

The restructuring comes as HP reports growing momentum in AI-enabled PC sales. Demand for AI-enabled PCs reached over 30 percent of HP's shipments in the fourth quarter ended October 31, signaling a significant market shift that the company aims to capitalize on through its workforce transformation.

Strong Earnings Amid Workforce Cuts

Despite the planned layoffs, HP delivered solid fourth-quarter results that exceeded Wall Street expectations. The company reported quarterly earnings of 93 cents per share, beating analyst estimates of 92 cents, while quarterly revenue of $14.6 billion surpassed the Street estimate of $14.48 billion.

However, investors reacted negatively to the news, with HP stock falling 5.18 percent to $23.06 in extended trading on Tuesday following the announcement.

The company's forward guidance also disappointed analysts. HP expects fiscal 2026 adjusted profit per share between $2.90 and $3.20, below analysts' average estimate of $3.33. The outlook reflects added costs from current U.S. trade-related regulations and associated mitigation efforts, according to the company.

Memory Chip Costs Pose Additional Pressure

HP faces mounting challenges beyond its restructuring efforts. Morgan Stanley analysts have warned that a global memory chip price surge brought on by rising data center demand could push up costs and pressure profits at consumer electronics makers such as HP, Dell, and Acer.

The surge stems from Big Tech's aggressive investment in AI infrastructure, triggering price increases for dynamic random access memory and NAND chips amid fierce competition in the server market. Lores indicated HP expects to feel the impact in the second half of fiscal 2026, though the company maintains sufficient inventory for 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 explained.

Part of Broader Tech Industry Trend

The HP and Apple announcements represent the latest chapter in an ongoing wave of tech industry layoffs tied to AI transformation. This marks HP's second round of significant job cuts in 2025, following the elimination of 1,000 to 2,000 positions in February as part of a previously announced restructuring plan.

While Apple's layoffs remain limited in scope compared to HP's sweeping cuts, the simultaneous announcements underscore a disturbing pattern: major tech firms are reducing traditional roles while simultaneously expanding hiring in AI-related positions.

For global technology workers, particularly in key markets like India with extensive capability centers and offshore delivery models, these workforce reductions carry significant implications for future hiring patterns and job security in the sector.