Technology giant HP has announced plans to reduce its global workforce by 4,000 to 6,000 employees by the end of October 2028. The cuts represent approximately one-tenth of the company’s 56,000-person organization and reflect its strategic commitment to integrating artificial intelligence across operations to accelerate innovation and boost productivity.
Product development teams, internal operations staff, and customer support departments will experience the most significant impact from the planned workforce reductions. HP expects to incur $650 million in restructuring costs 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.
Financial results reveal strong revenue performance, with HP exceeding analyst expectations by posting $14.6 billion in fourth-quarter sales. The company has achieved significant market penetration 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 accelerating across markets.
However, earnings guidance disappointed market analysts. HP forecasts adjusted net earnings between $2.90 and $3.20 per share for the upcoming year, significantly below the consensus estimate of $3.33. Escalating memory chip costs driven by datacenter demand for AI infrastructure have substantially increased production expenses, with memory now representing 15-18% of typical PC costs. Trade tariffs add additional pressure on profit margins.
Market response proved negative, with HP shares declining 6% after the announcement. The company’s strategy mirrors broader industry trends as organizations increasingly adopt artificial intelligence and automation technologies to optimize operations and reduce costs, despite the significant human impact of workforce displacement.