HP has unveiled a workforce reduction program eliminating 4,000 to 6,000 employees globally by October 2028, affecting approximately 11% of its 56,000-person workforce. Chief Executive Enrique Lores framed the decision as necessary for embedding artificial intelligence capabilities throughout the organization to drive product innovation, enhance customer satisfaction, and improve operational efficiency.
The job eliminations will primarily target product development, internal operations, and customer support areas. The restructuring carries an upfront cost of $650 million but promises to generate $1 billion in annual savings once completed in 2028. This marks the company’s second significant workforce reduction this year, following the elimination of up to 2,000 positions in February.
HP’s revenue performance exceeded market expectations, with fourth-quarter sales reaching $14.6 billion. The company has captured considerable market share in AI-enabled computers, which comprised over 30% of shipments during the quarter concluding October 31. Consumer and enterprise demand for AI-integrated computing solutions continues growing robustly.
Despite strong revenue results, HP’s earnings outlook fell short of analyst projections. The company forecasts adjusted net earnings between $2.90 and $3.20 per share for the coming year, substantially below expectations of $3.33. Rising memory chip costs driven by intense datacenter demand have significantly impacted production expenses, with memory components now accounting for 15-18% of PC costs. Trade tariffs further complicate profitability.
Investors reacted unfavorably, sending HP shares down 6% following the announcement. The company’s transformation reflects widespread industry movement toward AI-driven operations as businesses increasingly leverage automation technologies to streamline operations and reduce costs, fundamentally altering traditional employment models.
6,000 HP Jobs Sacrificed for Artificial Intelligence Integration
