HP Eliminates 6,000 Jobs While Betting Future on AI Technology

Technology manufacturer HP has set in motion a comprehensive workforce reduction initiative that will eliminate between 4,000 and 6,000 positions globally by the end of October 2028. The cuts affect approximately 11% of the company’s 56,000-employee organization, with CEO Enrique Lores describing AI integration as essential for driving innovation and operational excellence.
Product development teams, internal operations staff, and customer support personnel will experience the most significant impact from the planned reductions. HP expects to incur $650 million in restructuring expenses while positioning the company to achieve $1 billion in annual savings by 2028. These reductions follow earlier layoffs of 1,000 to 2,000 employees in February, indicating ongoing organizational transformation.
HP’s financial performance shows impressive revenue generation, with fourth-quarter sales reaching $14.6 billion and surpassing market expectations. The company has captured considerable market share in AI-enabled computers, which accounted for more than 30% of shipments during the quarter ending October 31. Demand for AI-integrated computing solutions continues growing across consumer and enterprise segments.
However, profitability projections disappointed investors. HP forecasts adjusted earnings per share between $2.90 and $3.20 for the upcoming year, falling below analyst 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 add additional financial pressure.
Market response proved negative, with HP shares declining 6% after the announcement. The company’s transformation reflects broader industry movement toward AI-driven operations as businesses increasingly deploy automation technologies to optimize processes and reduce expenses, fundamentally altering traditional employment structures.