HP Plans Up to 6,000 Layoffs by 2028 as AI Adoption Accelerates—and Global Memory Chip Prices Add New Pressures

HP Inc. is entering one of the most consequential transitions in its recent history. On November 25, the company announced that it will cut 4,000 to 6,000 jobs globally by fiscal 2028, marking a major restructuring as it doubles down on artificial intelligence (AI), supply-chain optimization, and long-term cost control.

At the same time, HP faces a mounting challenge that could impact its profitability far more than labor costs: a global surge in memory-chip prices and tightening supply driven by explosive AI infrastructure growth. These forces are reshaping the PC, printing, and consumer electronics sectors from the ground up — and HP is caught in the middle.

This article breaks down the job cuts, financial guidance, AI adoption plan, competitive risks, chip-supply pressures, and the broader macro shifts that will define HP’s path to 2028.

1. Why HP Is Cutting Up to 6,000 Jobs by 2028

During a press briefing, HP CEO Enrique Lores explained that the cuts will largely affect teams in:

1. Product development
2. Internal operations
3. Customer support

Lores said the restructuring is designed to streamline processes and integrate AI into internal workflows to improve speed, customer experience, and overall efficiency.

“We expect this initiative will create $1 billion in gross run-rate savings over three years,”
— Enrique Lores, HP CEO

The job cuts follow a separate reduction earlier this year, when HP laid off an additional 1,000 to 2,000 employees as part of an earlier plan.

Layoffs of this size indicate more than cost trimming — they signal a strategic shift in HP’s identity. The company is moving from a traditional PC and printer manufacturer toward an AI-enabled hardware and solutions provider.

2. AI-Enabled PCs Are Rising Fast—and Reshaping HP’s Product Roadmap

Despite macro pressure, demand for AI PCs is increasing quickly. HP said AI-enabled PCs accounted for over 30% of its total PC shipments in the quarter ending October 31.

This is significant for two reasons:

1. It validates HP’s strategy to integrate AI deeply into its product lines.
2. It demonstrates early consumer and enterprise willingness to pay for AI capabilities integrated directly into devices.

AI PCs typically include:

• On-device large language model processing (LLMs)
• Neural processing units (NPUs)
• Enhanced inference acceleration
• Low-latency workflows for productivity, media, and coding
• AI-driven battery life optimization

As enterprise workloads shift toward hybrid inference (cloud + local), HP expects AI PCs to become its primary growth driver from 2025–2028.

3. HP’s Financial Guidance Shows Caution: 2026 Outlook Falls Short of Analyst Expectations

Despite expected operational savings, HP issued a cautious forecast for fiscal 2026:

• Adjusted EPS: $2.90–$3.20, below analysts’ estimate of $3.33
• Q1 adjusted EPS: $0.73–$0.81, with the midpoint slightly under expectations

The company did beat revenue expectations for the most recent quarter:

• Q4 revenue: $14.64 billion, above the $14.48 billion consensus

But the underlying message is clear:
HP expects rising component costs — especially memory — to pressure margins through 2026 and beyond.

4. New Pressure #1: Global Memory-Chip Prices Are Surging—and HP Is in the Crosshairs

One of the most critical additions to the HP 2028 story is the global spike in DRAM and NAND prices. Due to explosive AI data-center buildouts, the world is entering a memory-chip super-cycle.

Why are memory prices rising?

1. Big Tech (Microsoft, Meta, Amazon, Google) is massively expanding AI training and inference clusters.
2. High-bandwidth memory (HBM), DRAM, and NAND demand is outpacing supply.
3. Server manufacturers are competing aggressively for limited inventory.
4. Suppliers like Samsung, SK Hynix, and Micron have already issued multiple price hikes—some sources estimate 30%–60%.

How does this affect HP?

Unlike server giants (Dell, Supermicro, Lenovo, Huawei), which can pass through memory costs more easily, HP operates in price-sensitive PC and consumer electronics markets.

So HP faces a double hit:

1. Higher bill of materials (BOM) for PCs, laptops, printers, and peripherals
2. Lower flexibility to raise retail prices without hurting demand

Lores acknowledged this directly, saying HP expects the impact to hit hardest in the second half of fiscal 2026.

HP is responding by:

• Qualifying lower-cost component suppliers
• Reducing memory configurations in certain devices
• Adjusting pricing strategically
• Drawing down current inventory to offset immediate pressure

But none of these fully solve the structural issue:
AI demand is overwhelming the global memory market, and HP does not have the same leverage as AI-infrastructure hardware companies.

5. New Pressure #2: Macro AI Infrastructure Expansion Is Transforming the Entire Hardware Industry

What’s happening to HP isn’t isolated — it’s part of a broader macro transformation.

AI infrastructure buildouts are causing:

Supply-chain tightening

• Memory, GPUs, NPUs, SSDs, networking chips are in multi-year shortage cycles.

Price volatility

• Manufacturers face unpredictable BOM swings quarter-to-quarter.

Shifting hardware standards

• AI PCs require new thermal designs, new compute modules, new battery profiles, and new memory architectures.

Longer lead times for key components

• AI-related components now dominate production queues at major fabs.

In effect:

AI is reshaping the global hardware supply chain faster than traditional PC makers can adapt.

HP’s 2028 plan must be viewed within this macro environment — where upstream component constraints can neutralize downstream cost-cutting gains.

6. Industry Comparisons: How HP Stacks Up Against Competitors

While HP’s stock dipped following the announcement, some competitors have benefited from AI-centric market positioning.

Dell Technologies

• Stock rose thanks to strong AI server demand.
• More insulated from PC pricing pressure due to high-margin enterprise infrastructure.

Acer & Lenovo

• Expected to face similar memory-chip cost pressures.
• Rely more heavily on mainstream consumer PCs, where margins are already thin.

HP sits somewhere in between — strong brand recognition, large enterprise footprint, but a heavier reliance on the PC category than Dell or Apple.

7. Can HP’s AI Pivot Offset the Structural Cost and Supply Constraints?

The success of HP’s 2028 plan depends on four factors:

Adoption of higher-margin AI PCs

• If consumer and enterprise AI PC demand continues rising, HP could offset memory-cost inflation.

Ability to accelerate automation

• Job cuts alone don’t guarantee savings — execution matters.

Supply-chain agility

• HP must diversify suppliers, redesign hardware for lower memory dependency, and optimize BOM.

Stability of the global memory market

• If prices remain elevated through 2026–2027, profitability pressure will persist.

8. What HP’s Layoffs and Strategy Mean for the Tech Sector Heading Toward 2028

HP’s shift is a microcosm of a much larger transformation happening across the global tech industry:

AI is rewriting workforce structures.

Automation is reducing demand for traditional product-development and service roles.

AI PCs will become the default.

By 2027–2028, “non-AI PCs” may become a niche category.

Component shortages will shape pricing and design.

The supply chain is now driven by AI server demand, not consumer electronics.

Hardware companies must reinvent their value.

HP is trying to reposition itself as an AI-enabled solutions company — not just a PC brand.

 

Conclusion: HP’s Path to 2028 Is Filled With Opportunity—And Volatility

HP’s plan to cut up to 6,000 jobs by 2028 is just one part of a much bigger strategic transformation. The company is embracing AI-enabled product development, automating internal operations, and pushing deeper into the emerging AI PC category.

But HP also faces significant headwinds:

• Global memory-chip shortages and price increases
• AI infrastructure expansion dominating semiconductor supply
• Margin pressure in the PC market
• Investor skepticism driven by cautious financial guidance

The next 24–36 months will determine whether HP’s AI pivot and operational overhaul are enough to offset rising component costs and intensifying competition.

One thing is clear:
AI is no longer a feature — it is the new operating system of the hardware industry. The winners of 2028 will be those who adapt the fastest.