Computer maker HP has set in motion a workforce reduction initiative that will eliminate between 4,000 and 6,000 positions globally by the end of October 2028. The California-based company employs approximately 56,000 people, and the cuts reflect its strategic pivot toward artificial intelligence integration across product development, operations, and customer service.
Product development areas, internal operations, and customer support functions will experience the most significant impact from the planned reductions. HP anticipates spending $650 million on restructuring 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 shows HP exceeding expectations, with fourth-quarter sales reaching $14.6 billion. The company has achieved remarkable penetration in AI-enabled computers, which represented more than 30% of shipments during the quarter ending October 31. Consumer and enterprise appetite for AI-integrated computing solutions continues growing at an accelerated pace.
However, earnings guidance disappointed market watchers. HP forecasts adjusted net earnings between $2.90 and $3.20 per share for the coming year, falling below analyst expectations 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 add further complications.
Stock markets reacted negatively to the announcement, with HP shares falling 6%. The company’s transformation mirrors broader industry movement toward AI-driven operations as businesses leverage automation technologies to optimize processes and reduce expenses, fundamentally altering traditional employment patterns.