Technology giant HP has unveiled a workforce reduction program eliminating 4,000 to 6,000 employees globally by October 2028, affecting approximately 11% of its 56,000-employee base. The California technology company positions the decision as fundamental to its artificial intelligence integration strategy, with leadership highlighting AI’s transformative potential for innovation and productivity.
The workforce reductions will primarily target 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. This marks the company’s second substantial workforce reduction this year, following the elimination of up to 2,000 positions in February.
HP’s financial performance demonstrates strong revenue generation, with fourth-quarter sales totaling $14.6 billion and surpassing market expectations. The company has successfully captured market share in AI-enabled computers, which accounted for more than 30% of shipments during the quarter concluding October 31. Demand for AI-integrated computing solutions continues accelerating across diverse market segments.
Despite revenue achievements, HP’s profit 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 datacenter demand for AI infrastructure have significantly impacted production expenses, with memory components now accounting for 15-18% of PC costs. Trade tariffs further pressure margins.
Market response proved sharply negative, with HP shares declining 6% after the announcement. The company’s strategy reflects broader industry trends as organizations increasingly deploy AI and automation technologies to streamline operations and reduce costs, despite the considerable human impact of workforce displacement.