Computer maker HP has committed to eliminating between 4,000 and 6,000 positions globally by the end of October 2028 as part of its strategic pivot toward artificial intelligence. The workforce reduction affects approximately 11% of the company’s 56,000 employees, with CEO Enrique Lores characterizing the move as necessary for accelerating product development and improving operational efficiency.
Product development areas, internal operations, and customer support functions will experience the most significant impact from the planned reductions. HP anticipates spending $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.
Revenue performance shows HP exceeding expectations, with fourth-quarter sales reaching $14.6 billion. The company has achieved remarkable success with AI-capable personal computers, which represented more than 30% of shipments during the quarter ending October 31. Consumer and enterprise appetite for AI-integrated computing solutions continues expanding at an impressive pace.
However, earnings guidance disappointed market watchers. HP forecasts 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 further complications.
Stock markets reacted negatively to the announcement, with HP shares falling 6%. The company’s transformation mirrors broader industry movement toward AI-driven operations as businesses leverage automation technologies to optimize processes and reduce expenses, fundamentally reshaping employment patterns across the technology sector.