HP Restructures, Focuses on AI

HP plans to reduce its workforce by 4,000 to 6,000 employees by fiscal year 2028 as part of a strategic restructuring. This initiative aims to streamline operations and drive the adoption of artificial intelligence across its PC and printer business. The company expects to save approximately $1 billion through these measures.

The restructuring occurs amidst rising memory costs, driven by increased demand for AI and data centres. While HP anticipates that current inventory will buffer against these costs in the near term, they project shrinking profit margins in 2026 as memory prices continue to climb. Despite these challenges, AI-enabled PCs accounted for over 30% of the company's shipments last quarter, contributing to revenues of $14.64 billion.

HP's move reflects a broader trend within the tech sector, where companies are increasingly turning to automation and AI to redefine operations. Peers like Dell and Acer are facing similar cost pressures, intensifying the race to integrate AI and manage expenses effectively.