Technology manufacturer HP has committed to eliminating between 4,000 and 6,000 positions worldwide by the end of October 2028 as part of its artificial intelligence integration strategy. The cuts represent approximately 11% of the company’s 56,000-employee workforce, with CEO Enrique Lores emphasizing AI’s transformative potential for product innovation and operational efficiency.
The workforce reductions will primarily impact product development teams, internal operations staff, and customer support personnel. HP anticipates incurring $650 million in restructuring costs while positioning the company to achieve $1 billion in annual savings by 2028. These layoffs follow previous reductions of 1,000 to 2,000 employees implemented in February, indicating ongoing organizational transformation.
Financial performance demonstrates HP’s market strength, with fourth-quarter revenues totaling $14.6 billion and exceeding analyst projections. The company has successfully penetrated the AI-enabled computer market, with these advanced products comprising over 30% of shipments in the quarter concluding October 31. Consumer and business demand for AI-integrated technology continues accelerating.
However, profitability projections present challenges. HP forecasts adjusted earnings per share between $2.90 and $3.20 for the upcoming year, substantially below analyst expectations of $3.33. Rising memory chip costs driven by datacenter demand for AI infrastructure have significantly impacted production expenses, with memory components now accounting for 15-18% of PC costs. Trade tariffs further complicate the financial landscape.
Investors responded unfavorably, driving HP shares down 6% after the announcement. The company’s strategy reflects broader industry trends as organizations increasingly leverage artificial intelligence and automation to enhance competitiveness and reduce operational costs, despite the significant human impact of workforce displacement.
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