6,000 HP Positions Cut as Company Bets on AI Transformation

HP has unveiled a workforce reduction program eliminating 4,000 to 6,000 employees globally by the end of October 2028, representing approximately one-tenth of its 56,000-person workforce. Chief Executive Enrique Lores framed the decision as necessary for embedding artificial intelligence capabilities throughout the organization to accelerate product development and enhance customer satisfaction.
The job eliminations will primarily target product development, internal operations, and customer support areas. While requiring an upfront investment of $650 million in restructuring costs, HP projects the initiative will deliver $1 billion in annual savings once fully implemented. 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 strength, with fourth-quarter sales totaling $14.6 billion and exceeding analyst estimates. The company has successfully penetrated the AI-enabled computer market, with these advanced products comprising over 30% of shipments in the quarter concluding October 31. Consumer and enterprise demand for AI-integrated technology continues expanding rapidly.
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.