HP’s AI Strategy Triggers Major Workforce Reduction of 6,000

Computer maker HP has announced plans to reduce its global workforce by 4,000 to 6,000 employees by the end of October 2028 as part of its artificial intelligence integration strategy. The cuts represent approximately 11% of the company’s 56,000-person organization, with CEO Enrique Lores describing AI adoption as critical for accelerating innovation and enhancing customer experiences.
The workforce reductions will concentrate on product development teams, internal operations staff, and customer support departments. The restructuring requires an initial investment of $650 million but promises to generate $1 billion in annual savings once completed in 2028. This marks the company’s second substantial workforce reduction this year, following the elimination of 1,000 to 2,000 positions in February.
HP’s financial performance shows impressive revenue generation, with fourth-quarter sales totaling $14.6 billion and surpassing market expectations. The company has achieved significant success with AI-capable personal computers, which accounted for more than 30% of shipments during the quarter ending October 31. Demand for AI-integrated computing solutions continues expanding rapidly.
Despite revenue achievements, HP’s profit outlook disappointed market analysts. The company forecasts adjusted net earnings between $2.90 and $3.20 per share for the coming year, significantly below the consensus estimate 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 further constrain profitability.
Market response proved sharply negative, with HP shares declining 6% after the announcement. The company’s transformation mirrors widespread industry movement toward AI-driven operations as businesses deploy automation technologies to streamline processes and reduce costs, fundamentally reshaping employment across the sector.