HP has announced a workforce reduction program eliminating 4,000 to 6,000 positions globally by October 2028, affecting approximately one-tenth of its 56,000 employees. Chief Executive Enrique Lores characterized the move as necessary for embedding artificial intelligence capabilities throughout the organization to drive innovation, enhance customer experiences, and improve productivity.
The layoffs will concentrate in product development, internal operations, and customer support departments. The restructuring carries an upfront cost of $650 million but promises to deliver $1 billion in annual savings once fully implemented in 2028. This represents the second major workforce reduction this year, following the elimination of 1,000 to 2,000 positions in February.
HP’s revenue performance exceeded analyst expectations, with fourth-quarter sales reaching $14.6 billion. The company has achieved significant success with AI-capable personal computers, which accounted for more than 30% of shipments during the quarter ending October 31. Demand for AI-integrated computing solutions continues expanding across consumer and enterprise segments.
Despite strong revenue results, HP’s profit outlook disappointed investors. The company projects adjusted net earnings between $2.90 and $3.20 per share for the coming year, significantly below the consensus estimate of $3.33. Escalating memory chip costs driven by intense datacenter demand have substantially increased production expenses, with memory now representing 15-18% of typical PC costs. Trade tariffs add additional financial constraints.
Market response proved sharply negative, with HP shares declining 6% after the announcement. The company’s transformation mirrors widespread industry movement toward AI-driven operations as businesses deploy automation technologies to streamline processes and reduce expenses, fundamentally altering traditional employment models.
