HP announced plans to cut 6,000 employees

In a press conference on November 25, Enrique Lores, HP CEO, said the cuts last until fiscal year 2028 and affect about 10% of the company’s workforce, in product development, internal operations and customer support groups. The new move aims to speed up product development, customer satisfaction and productivity. The company expects this to generate $1 billion in gross savings over three years.

“This is something we have to do to ensure the company remains competitive,” Mr. Lores said.

As of October 2024, HP’s workforce is 58,000 people. The company laid off 1,000-2,000 employees under a restructuring plan announced three years ago, when the total number of employees was about 61,000. HP said the plan helps the company save $2.2 billion.

The new round of cuts entails restructuring costs of $650 million, of which $250 million falls in fiscal year 2026, starting November 1, 2025. HP also forecast fiscal year 2026 profits to be lower than expected as global memory chip prices skyrocketed due to increased demand from data centers, pushing up costs and putting pressure on the profits of consumer electronics manufacturers such as HP, Dell, and Acer.

HP currently has enough inventory for the first half of the year and anticipates an impact in the second half, Lores said. “We provided a conservative forecast for the second half of the year, while also taking aggressive action such as looking at lower-cost vendors, reducing memory configurations and adjusting prices,” he added.

Theo Straits TimesHP’s move reflects a growing trend in the technology sector, as companies are investing heavily in AI development and leveraging AI to reduce operating costs. A series of technology giants such as Google, Microsoft, and Amazon have announced staff cuts over the past two years, with many companies citing the need to reallocate resources, including personnel, to artificial intelligence initiatives.