Mirror Review
November 26, 2025
HP, the global PC and printing maker, is cutting up to 6,000 jobs as it reshapes the company around AI and prepares for higher operating costs.
The announcement comes as HP moves forward with a restructuring plan that targets $1 billion in annual savings by fiscal 2028.
This round of HP layoffs, affecting up to 10% of the workforce, is part of a new shift toward AI-powered operations and a response to rising component prices that are putting pressure on margins.
CEO Enrique Lores framed the move as necessary for long-term competitiveness, saying, “We need to redesign our processes with AI at the center. It is something we have to do to make sure the company stays competitive.”
Why HP Is Cutting 6,000 Jobs
HP confirmed that teams in product development, internal operations, and customer support will be most affected.
The company has been testing AI workflows for two years, and according to Lores, the pilots showed that AI can significantly reduce repetitive tasks.
Enrique Lores explained: “Once we know how a process can be redesigned using AI, it can have a very significant impact. We see this as a unique opportunity we cannot miss.”
The restructuring also reflects HP’s strategy to offset rising operating costs, including:
- Increasing memory chip prices across the PC industry
- Higher expenses linked to U.S. trade regulations and supply chain adjustments
- Slower profit growth expected in fiscal 2026
CFO Karen Parkhill pointed to the challenging environment, saying, “The pricing environment is competitive, and customers are delaying purchases in some segments.”
The Conditions HP Is Preparing For
- AI-Era Memory Prices Are Rising
Memory chips like DRAM and NAND have become more expensive because of global demand from cloud and AI companies. These components now make up 15% to 18% of the total cost of a typical PC.
Lores warned, “The increase was expected, but the rate has accelerated in the last few weeks.”
HP expects the biggest impact in the second half of fiscal 2026, and it is taking steps such as:
- Reducing memory configurations in devices where customers do not require higher capacity
- Working with lower-cost suppliers
- Raising prices on select PC models
- A New PC Refresh Cycle
With Microsoft officially ending support for Windows 10, HP expects a wave of upgrades. The company says 60% of its user base has already moved to Windows 11, giving HP a reliable replacement cycle between 2025 and 2027.
- AI PCs Are Becoming the New Core of the Business
More than 30% of HP’s Q4 PC shipments were AI-enabled devices. These systems require new engineering approaches, specialized chips, and streamlined development cycles, which is part of why the company is reorganizing its workforce.
Financial Analysis: Why HP Needed Urgent Action
HP’s recent earnings show the business is stable but facing real cost pressures that require immediate adjustments, like the 6,000 HP layoffs.
- Quarterly revenue: $14.64 billion, which is slightly better than expected
- PC revenue: up 8%, helped by Windows 11 upgrades
- Printing revenue: down 4%, affected by delayed customer purchases
- Fiscal 2026 profit outlook: $2.90 to $3.20 per share, below analyst expectations of $3.33
Investors reacted negatively because rising memory prices and regulations will continue to push operating costs higher. HP shares fell after the announcement.
HP CEO Enrique Lores addressed this directly: “We are taking a prudent approach to our outlook while implementing aggressive actions to manage costs.”
This explains why HP is cutting jobs now. The company wants to protect long-term profitability before external cost pressures worsen.
How the HP Layoffs Fit Into HP’s Larger Plan
The restructuring will cost about $650 million, including $250 million in fiscal 2026. The long-term goal is to lower operating costs permanently and rebuild HP around AI-enabled processes.
Lores emphasized that the company will continue investing in areas that support AI and new PC architectures. “I think any work is going to be impacted by AI, and we need to take advantage of it as a company,” he said.
This means the HP layoffs are not about shrinking. It is about reallocating resources to areas like:
- AI engineering
- Advanced hardware development
- Software and firmware modernization
- Cloud and platform integration
Conclusion: What the HP Layoffs Really Mean
The recent HP layoffs represent more than workforce cuts. They reflect HP’s strategic decision to redesign the company around AI so it can compete in a market where automation, higher component prices, and new PC demands are reshaping the economics of hardware.
If HP reaches its target of $1 billion in annual savings by 2028, the company will enter the next phase of AI PCs with a leaner and more efficient structure.
The critical test will be whether AI-powered processes can deliver the speed, cost savings, and innovation the company expects.
The next two years will show whether HP’s bet on internal reinvention through AI becomes a competitive advantage or a difficult transition period marked by rising pressures and intense market competition.
