Computer and printer manufacturer HP has outlined plans to reduce its workforce by 4,000 to 6,000 employees worldwide by October 2028, representing approximately 11% of its 56,000-person organization. The California-based company frames the decision as fundamental to its artificial intelligence strategy, with leadership highlighting AI’s potential to transform product development, customer service, and operational efficiency.
Product development teams, internal operations personnel, and customer support staff will bear the primary burden of the planned reductions. HP expects to spend $650 million on restructuring while achieving $1 billion in annual cost savings by 2028. These cuts follow earlier workforce reductions of 1,000 to 2,000 employees in February, demonstrating sustained organizational transformation.
Financial results reveal strong revenue performance, with HP exceeding expectations by posting $14.6 billion in fourth-quarter sales. The company has successfully captured market share in AI-enabled computers, which comprised more than 30% of shipments in the quarter ending October 31. This segment continues experiencing significant growth as technology adoption accelerates across markets.
However, profit outlook concerns have dampened investor enthusiasm. 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. Additional pressure comes from trade tariffs affecting profitability.
Stock markets reacted unfavorably, with HP shares falling 6% following the announcement. The company’s strategy exemplifies broader industry trends as organizations increasingly adopt artificial intelligence and automation technologies to optimize operations and reduce costs, despite significant workforce displacement.
