Computer maker HP has revealed plans to eliminate between 4,000 and 6,000 positions globally by the end of October 2028, affecting approximately one-tenth of its 56,000-member workforce. The move represents a strategic pivot toward artificial intelligence integration, with company leadership describing AI as a transformative force for accelerating innovation and improving customer outcomes.
Product development teams, internal operations personnel, and customer support staff will bear the primary impact of the planned reductions. The restructuring requires an upfront investment of $650 million but promises to deliver $1 billion in annual cost savings once fully implemented in 2028. These cuts follow earlier workforce reductions of 1,000 to 2,000 employees in February, demonstrating ongoing organizational transformation.
HP’s recent financial performance shows considerable strength in revenue generation, with fourth-quarter results reaching $14.6 billion and exceeding market expectations. The company has captured significant market share in AI-enabled computers, which represented over 30% of shipments during the quarter ending October 31. This segment continues experiencing robust growth as technology adoption accelerates.
However, profit outlook concerns have emerged. HP forecasts adjusted earnings per share between $2.90 and $3.20 for the upcoming year, falling substantially below analyst projections of $3.33. The shortfall primarily stems from soaring memory chip costs driven by datacenter demand for AI infrastructure. Memory components now account for 15-18% of PC production costs, with prices rising faster than anticipated in recent weeks.
Investors reacted negatively to the news, sending HP shares down 6%. The company’s strategy reflects broader industry transformation as organizations across sectors deploy AI and automation technologies to enhance efficiency and reduce operational costs, fundamentally altering traditional workforce structures and employment patterns.