HP Layoffs Follow Weak Guidance at HP Inc.
HP layoffs follow HP Inc.'s Nov. 25 results as it unveils an AI restructuring and issues FY26 EPS guidance below consensus, pressuring shares.
KEY TAKEAWAYS
- FY26 non-GAAP EPS guide $2.90-$3.20, below analyst consensus of $3.33.
- The fiscal 2026 plan cuts 4,000-6,000 jobs and targets $1.0B run-rate savings by fiscal 2028.
- HP expects about $650M in restructuring charges, with $250M booked in FY26.
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HP Inc. said on Nov. 25, 2025, that it would pursue a companywide restructuring, including workforce reductions through fiscal 2028 to accelerate artificial intelligence (AI) integration and cut costs, after reporting quarterly results and issuing fiscal 2026 profit guidance below analysts’ expectations.
Restructuring Plan and Financial Impact
The company launched a “fiscal 2026 plan” aimed at improving customer satisfaction, product innovation, and productivity through AI adoption. The plan includes cutting 4,000 to 6,000 jobs globally by the end of fiscal 2028 (October 2028) and targets about $1.0 billion in gross run-rate savings by then. HP expects to incur roughly $650 million in restructuring charges, with approximately $250 million booked in fiscal 2026.
This initiative follows HP’s prior Future Ready Transformation Program, which delivered $2.2 billion in annualized savings and affected about 9,400 employees. The company reported no regulatory approvals or government interventions related to the restructuring or AI efforts.
“We are taking decisive actions to mitigate recent cost headwinds,” CFO Karen Parkhill said in the company’s press release.
Quarterly Results and Guidance
HP reported fourth-quarter revenue of $14.6 billion, up 4.0% year-over-year, and non-GAAP earnings per share of $0.93. For fiscal 2025, revenue totaled $55.3 billion, a 3.0% increase, with non-GAAP EPS of $3.12 and free cash flow of $2.9 billion. The Personal Systems segment generated $10.4 billion in quarterly revenue, up 8.0%, while Printing revenue declined 4.0% to $4.3 billion.
For fiscal 2026, HP forecast non-GAAP diluted EPS between $2.90 and $3.20, below analyst consensus of $3.33. First-quarter EPS guidance ranges from $0.73 to $0.81, compared with a consensus of $0.79. The company projects free cash flow of $2.8 billion to $3.0 billion for the year.
Management cited rising memory costs and competitive pressure in the PC and printing markets as headwinds in the second half of fiscal 2026. It plans to offset these challenges through growth in premium product categories and increased AI integration in PCs.
The guidance and restructuring together set a near-term target for profitability and free cash flow while reallocating resources toward AI-enabled product initiatives.
