HP to cut up to 6,000 jobs by 2028 as it pivots toward AI, targets $1 billion in savings
HP Inc. will eliminate between 4,000 and 6,000 jobs worldwide by fiscal 2028 as part of a restructuring to streamline operations and accelerate AI-focused product development, aiming for roughly $1 billion in gross run-rate savings.
- Job cuts: 4,000–6,000 positions globally by fiscal 2028.
- Savings goal: Approximately $1 billion in gross run-rate savings over three years to reinvest in AI engineering.
- Timing: Financial impact expected to begin in the second half of fiscal 2026; lowered Q1 adjusted guidance to $0.73–$0.81 per share.
- Scope: Reductions will affect product development, internal operations and customer support while hiring prioritizes AI-specialized roles.
What HP said and why
Enrique Lores, HP’s chief executive, framed the plan as a necessary shift to speed innovation and better serve customers as demand for AI-enabled devices grows. Company leaders told reporters the restructuring will touch teams across product development, internal operations and customer support while HP reinvests in AI-focused capabilities.
“We are reorganizing to accelerate our AI roadmap and improve product cycles,” HP executives said, emphasizing a focus on AI-capable PCs after more than 30% of recent shipments were AI-capable models.
Financial impact and market pressures
HP says the restructuring targets roughly $1 billion in gross run-rate savings over three years, with parts of those savings expected to appear in financials beginning in the second half of fiscal 2026. To cope with market headwinds the company lowered its adjusted first-quarter profit guidance to $0.73–$0.81 per share, citing rising component costs — notably memory chips — linked to strong demand in data centers.
HP is qualifying lower-cost suppliers, reducing memory configurations in some products, and making selective price adjustments to manage margins while redirecting capital toward AI engineering and product road maps.
Broader economic context
The announcement comes amid broad corporate restructuring across 2025, with major firms including Amazon, Paramount and Molson Coors also announcing cuts. Economists characterize many of these moves as structural adjustments tied to digital transformation rather than isolated cost cuts. Senior economist Dan North at Allianz Trade Americas and remarks from Federal Reserve Chair Jerome Powell underscore a cooling but not collapsing labor market.
How the cuts will be implemented
HP said reductions will occur in phases through fiscal 2028 as teams are reorganized. The company has not provided a full breakdown by role or region, but indicated that affected areas include product development, internal operations and customer support. At the same time, HP intends to hire for AI-specialized roles even as it reduces headcount elsewhere.
Implications for San Luis Obispo, California
Economic impact: San Luis Obispo County is not a major HP employment center, but the Central Coast could see indirect effects. Local contractors and businesses that serve remote HP employees may face reduced demand if layoffs touch contractors or customers in the region.
Job market & small business effects: Cal Poly graduates and local tech workers may confront increased competition if displaced Bay Area workers seek more affordable housing and jobs in SLO County. Restaurants, retail and service businesses could experience lower weekday traffic.
Social and political effects
Local officials may be asked to expand workforce development programs and coordinate with Cal Poly and Cuesta College on retraining initiatives. Community services — including employment assistance and mental health resources — could face higher demand, and housing pressure may rise if displaced workers move inland.
Practical steps for residents and workers
- Job resources: Contact the San Luis Obispo County Workforce Development Board and local job centers for retraining and placement assistance.
- Education: Cal Poly and Cuesta College offer certificates and continuing education in software, data science and AI-related fields for re-skilling.
- Small businesses: Review cash flow and staffing plans; coordinate with local chambers of commerce to prepare for demand shifts.
- Community support: Volunteer with nonprofits providing resume workshops, job-search help and mental health services to displaced workers.
Sources
Primary reporting and figures in this article are drawn from American Bazaar Online. All facts, figures and timelines above preserve the original reporting.
