HP has announced a comprehensive workforce reduction program eliminating 4,000 to 6,000 positions globally by the end of October 2028. The cuts affect approximately 11% of the California company’s 56,000 employees, with leadership describing artificial intelligence integration as critical for driving innovation and operational efficiency.
Product development areas, internal operations, and customer support functions will bear the primary burden of the planned reductions. HP expects to incur $650 million in restructuring expenses while positioning the company to deliver $1 billion in annual savings by 2028. These layoffs follow previous reductions of 1,000 to 2,000 employees implemented in February, demonstrating sustained organizational transformation.
Revenue performance demonstrates HP’s market strength, with fourth-quarter sales totaling $14.6 billion and exceeding analyst projections. The company has successfully captured growing demand for AI-enabled computers, which comprised over 30% of shipments in the quarter concluding October 31. This market segment continues experiencing robust growth as technology adoption accelerates.
However, earnings guidance presented challenges. HP forecasts adjusted earnings per share between $2.90 and $3.20 for the upcoming year, substantially below analyst expectations of $3.33. Rising memory chip costs driven by datacenter demand for AI infrastructure have significantly impacted production expenses, with memory components now accounting for 15-18% of PC costs. Trade tariffs add additional financial pressure.
Investors responded unfavorably to the news, driving HP shares down 6%. The company’s strategy reflects broader industry trends as organizations increasingly leverage artificial intelligence and automation to enhance competitiveness and reduce operational costs, despite the significant human impact of workforce displacement.