HP has unveiled a workforce reduction program eliminating 4,000 to 6,000 employees globally by the end of October 2028, affecting approximately 11% of its 56,000-person workforce. The California technology company frames the decision as fundamental to its artificial intelligence strategy, with leadership highlighting AI’s capacity to transform product development and customer service.
The job eliminations will primarily target product development, internal operations, and customer support areas. The restructuring carries an upfront cost of $650 million but promises to generate $1 billion in annual savings once completed in 2028. This marks the company’s second significant workforce reduction this year, following the elimination of up to 2,000 positions in February.
Revenue performance demonstrates HP’s competitive position, with fourth-quarter sales totaling $14.6 billion and exceeding analyst estimates. The company has successfully captured market share in AI-enabled computers, which comprised over 30% of shipments in the quarter concluding October 31. This segment continues experiencing robust growth as technology adoption accelerates.
Despite strong revenue results, HP’s earnings outlook fell short of analyst projections. The company forecasts adjusted net earnings between $2.90 and $3.20 per share for the coming year, substantially below expectations of $3.33. Rising memory chip costs driven by intense datacenter demand have significantly impacted production expenses, with memory components now accounting for 15-18% of PC costs. Trade tariffs further complicate profitability.
Investors reacted unfavorably, sending HP shares down 6% following the announcement. The company’s transformation reflects widespread industry movement toward AI-driven operations as businesses increasingly leverage automation technologies to enhance competitiveness and reduce operational costs, fundamentally reshaping employment structures.