Computer maker HP has announced plans to reduce its global workforce by 4,000 to 6,000 employees by October 2028, affecting approximately 11% of its 56,000-person organization. Chief Executive Enrique Lores framed the decision as essential for embedding artificial intelligence capabilities throughout the company to accelerate product development and enhance customer satisfaction.
Product development areas, internal operations, and customer support functions will experience the most significant impact from the planned reductions. HP expects to spend $650 million on restructuring while achieving $1 billion in annual cost savings by 2028. These layoffs represent the second major workforce reduction this year, following the elimination of up to 2,000 positions in February.
HP’s financial results show strong revenue performance, with fourth-quarter sales reaching $14.6 billion and surpassing market expectations. The company has captured significant market share in AI-enabled computers, which represented more than 30% of shipments during the quarter ending October 31. This segment continues experiencing robust growth as technology adoption accelerates.
However, profitability projections presented challenges for investors. 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 datacenter demand for AI infrastructure have pushed memory costs to 15-18% of PC production expenses. Trade tariffs add further pressure on profit margins.
Stock markets reacted unfavorably to the announcement, with HP shares falling 6%. The company’s strategy exemplifies broader industry trends as organizations increasingly deploy AI and automation technologies to optimize operations and reduce expenses, despite the significant human cost of workforce displacement.