Technology manufacturer HP has outlined plans to cut between 4,000 and 6,000 positions globally by the end of October 2028, affecting approximately 11% of its 56,000 employees. Chief Executive Enrique Lores characterized the move as a critical step in embedding artificial intelligence throughout the company to boost innovation, customer satisfaction, and productivity across all operations.
The workforce reductions will concentrate on product development, internal operations, and customer support areas. While requiring an initial investment of $650 million in restructuring costs, HP anticipates achieving $1 billion in annual savings by 2028. These cuts represent the second major workforce reduction this year, following the elimination of 1,000 to 2,000 jobs during February’s restructuring.
HP’s revenue performance exceeded expectations, with fourth-quarter sales reaching $14.6 billion. The company has successfully capitalized on surging demand for AI-capable personal computers, which comprised over 30% of total shipments in the quarter concluding October 31. This growth trajectory demonstrates HP’s competitive position in the emerging AI-integrated computing market.
However, profitability projections paint a less optimistic picture. HP forecasts adjusted net earnings between $2.90 and $3.20 per share for the upcoming year, significantly below analyst expectations of $3.33. The shortfall stems from escalating memory chip prices driven by datacenter demand and additional costs associated with trade tariffs. Memory components have increased to 15-18% of PC production costs, with price acceleration exceeding anticipated levels.
Stock markets reacted negatively, with HP shares declining 6% following the announcement. The company’s transformation exemplifies broader trends as organizations increasingly adopt AI and automation technologies to streamline operations, reduce expenses, and maintain competitiveness, despite the significant human cost of workforce displacement.