HP has set in motion a substantial workforce reduction program that will eliminate 4,000 to 6,000 jobs globally by October 2028, representing a significant portion of its 56,000-person workforce. The computer and printer manufacturer justifies the decision as necessary for integrating artificial intelligence across its operations, with leadership emphasizing AI’s capacity to accelerate product development cycles and enhance customer experiences.
Product development teams, internal operations staff, and customer support departments will experience the most significant impact from the planned reductions. The restructuring carries an upfront cost of $650 million but promises to deliver $1 billion in annual savings once completed. This initiative follows HP’s earlier workforce reduction of 1,000 to 2,000 employees in February, indicating sustained commitment to operational transformation.
HP’s recent financial performance shows strength in certain areas, with fourth-quarter revenues reaching $14.6 billion and surpassing analyst estimates. The company has successfully captured growing demand for AI-enabled computers, which accounted for more than 30% of its quarterly shipments ending October 31. This market segment continues expanding as consumers and businesses seek advanced computing capabilities.
Despite revenue success, HP’s profit outlook disappointed investors. The company projects adjusted earnings per share between $2.90 and $3.20 for the coming year, falling short of the $3.33 analyst consensus. Rising memory chip costs, driven by intense datacenter demand for AI infrastructure, have significantly increased production expenses. Memory components now represent 15-18% of typical PC costs, with prices accelerating beyond expected rates in recent weeks.
The market responded unfavorably to the announcement, with HP shares falling 6%. The company’s strategy reflects widespread industry movement toward AI-driven operations, as organizations across sectors implement automation technologies to reduce costs and improve efficiency, fundamentally altering traditional employment patterns.