HP has committed to a substantial workforce reduction of 4,000 to 6,000 employees worldwide by the end of October 2028, representing approximately one-tenth of its 56,000-employee organization. The technology manufacturer frames the decision as critical to its artificial intelligence strategy, with CEO Enrique Lores emphasizing AI’s capacity to transform product development and customer service operations.
Product development areas, internal operations, and customer support functions will bear the primary burden of the planned reductions. HP expects to incur $650 million in restructuring expenses while positioning the company to achieve $1 billion in annual savings by 2028. These reductions follow earlier layoffs of 1,000 to 2,000 employees in February, indicating ongoing organizational transformation.
Financial results reveal impressive revenue performance, with HP exceeding analyst expectations by posting $14.6 billion in fourth-quarter sales. The company has achieved significant market penetration with AI-capable personal computers, which comprised over 30% of shipments during the quarter ending October 31. Consumer and enterprise demand for AI-integrated computing solutions continues growing robustly.
However, profitability projections presented challenges. HP forecasts adjusted earnings per share between $2.90 and $3.20 for the upcoming year, falling below analyst expectations of $3.33. Soaring memory chip prices driven by intense datacenter demand have pushed memory costs to 15-18% of PC production expenses. Trade tariffs add additional financial constraints.
Investors responded unfavorably to the news, driving HP shares down 6%. The company’s transformation exemplifies widespread industry movement toward AI-driven operations as businesses increasingly leverage automation technologies to enhance competitiveness and reduce operational costs, despite significant workforce displacement.