Technology manufacturer HP has committed to a workforce reduction of 4,000 to 6,000 employees globally by October 2028, representing approximately 11% of its 56,000-employee base. Chief Executive Enrique Lores framed the decision as necessary for embedding artificial intelligence capabilities throughout the organization to accelerate product development and enhance customer experiences.
The job eliminations will concentrate on product development teams, internal operations staff, and customer support departments. While requiring an initial investment of $650 million in restructuring costs, HP projects the initiative will deliver $1 billion in annual savings once fully implemented in 2028. This marks the company’s second significant workforce reduction this year, following the elimination of up to 2,000 positions in February.
Financial results show HP exceeding revenue expectations, with fourth-quarter sales reaching $14.6 billion. The company has achieved considerable market penetration with AI-capable personal computers, which accounted for more than 30% of shipments during the quarter ending October 31. Consumer and enterprise demand for AI-integrated computing solutions continues expanding rapidly.
Despite revenue achievements, HP’s earnings guidance disappointed market analysts. The company 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 further constrain profitability.
Market response proved sharply negative, with HP shares falling 6% following the announcement. The company’s transformation mirrors widespread industry movement toward AI-driven operations as businesses deploy automation technologies to streamline processes and reduce costs, fundamentally reshaping employment across the sector.