Computer and printer manufacturer HP has unveiled a workforce reduction program eliminating 4,000 to 6,000 employees globally by October 2028, affecting approximately one-tenth of its 56,000-person workforce. Chief Executive Enrique Lores framed the decision as essential for integrating artificial intelligence throughout the company to accelerate product innovation and enhance operational efficiency.
The workforce reductions 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 represents the second major workforce reduction this year, following the elimination of 1,000 to 2,000 positions in February.
Revenue performance demonstrates HP’s market success, with fourth-quarter sales reaching $14.6 billion and exceeding analyst projections. The company has captured considerable market share in AI-enabled computers, which represented more than 30% of shipments during the quarter ending October 31. This segment continues experiencing significant growth as technology adoption accelerates.
Despite strong revenue results, HP’s earnings outlook disappointed investors. The company forecasts adjusted net earnings between $2.90 and $3.20 per share for the coming year, below the consensus estimate of $3.33. Escalating memory chip costs driven by datacenter demand for AI infrastructure have substantially increased production expenses, with memory now representing 15-18% of typical PC costs. Trade tariffs further complicate profitability.
Stock markets reacted unfavorably to the announcement, with HP shares falling 6%. The company’s strategy mirrors widespread industry trends as organizations increasingly adopt artificial intelligence and automation technologies to optimize operations and reduce costs, fundamentally altering traditional employment models.
