HP Launches ‘Fiscal 2026 Plan’ to Cut 4,000-6,000 Jobs

PC and printer giant HP Inc. has announced a sweeping restructuring initiative that will eliminate between 4,000 and 6,000 jobs globally by the end of fiscal year 2028.

This significant workforce reduction, representing up to 10% of its global headcount, is part of a newly launched company-wide strategy, the “Fiscal 2026 Plan,” aimed at accelerating its transition toward an AI-first operating model and achieving substantial cost savings.

The Rationale: Pivoting to AI for Efficiency

HP CEO Enrique Lores framed the job cuts not merely as a cost-cutting measure, but as a crucial step in transforming the company’s foundational processes for the age of artificial intelligence.

According to Enrique, a deep commitment to leveraging AI drives the restructuring to enhance productivity, accelerate product innovation, and improve customer satisfaction.

Enrique noted that HP began piloting AI initiatives two years ago and learned that the true impact comes from redesigning core business processes around agentic AI capabilities.

Industry analysts suggest that AI automation particularly affects roles in product development, internal operations, and customer support, and HP expects these teams to be impacted by the cuts.

HP Inc.’s Financial Targets and Costs

The primary goal of the multi-year restructuring plan is to generate approximately $1 billion in gross run-rate savings by the end of fiscal 2028.

This saving will come from productivity measures, platform simplification, program consolidation, and the announced workforce reductions.

To implement this plan, HP estimates it will incur approximately $650 million in labor and non-labor restructuring charges.

The company projects around $250 million of these costs to accrue in fiscal year 2026, signaling the start of the major restructuring phase.

Broader Market Context and Financial Outlook

The news of the massive layoff came alongside HP’s fiscal 2025 earnings report.

While the company beat revenue estimates in the fourth quarter, posting $14.64 billion, its non-GAAP diluted earnings per share (EPS) forecast for fiscal 2026, projected to be between $2.90 and $3.20, fell short of Wall Street’s average estimate of $3.33.

This mixed financial outlook, combined with the job cut announcement, led to HP’s stock falling more than 5% in extended trading.

Adding to the financial pressure, HP is also bracing for rising component costs, particularly for dynamic random-access memory (DRAM) and NAND chips, driven by the intense demand for AI infrastructure globally.

CEO Enrique stated that HP has sufficient inventory for the first half of fiscal 2026 but is taking “prudent” actions, including qualifying lower-cost suppliers and taking price actions, to mitigate the expected impact in the second half.

This strategic overhaul positions HP for a leaner, AI-centric future, but also underscores the disruptive nature of artificial intelligence on traditional corporate structures.

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