Computer maker HP has outlined plans to eliminate between 4,000 and 6,000 positions worldwide by the end of October 2028 as part of its artificial intelligence integration strategy. The workforce reduction affects approximately one-tenth of HP’s 56,000-employee organization, with CEO Enrique Lores emphasizing AI’s potential to transform product innovation and customer service.
The layoffs will concentrate on product development teams, internal operations staff, and customer support personnel. The restructuring carries an upfront cost of $650 million but promises to generate $1 billion in annual savings once completed. This represents the second major workforce reduction this year, following the elimination of 1,000 to 2,000 positions in February.
Financial results reveal strong revenue performance, with HP exceeding analyst expectations by posting $14.6 billion in fourth-quarter sales. The company has achieved considerable market penetration with AI-capable personal computers, which represented more than 30% of shipments during the quarter ending October 31. Consumer and enterprise appetite for AI-integrated computing solutions continues expanding.
Despite revenue success, HP’s earnings outlook concerned investors. The company projects adjusted net earnings between $2.90 and $3.20 per share for the coming year, below the consensus estimate of $3.33. Soaring memory chip prices driven by intense datacenter demand have pushed memory costs to 15-18% of PC production expenses. Trade tariffs further constrain profitability margins.
Stock markets reacted negatively to the announcement, with HP shares falling 6%. The company’s transformation exemplifies widespread industry movement toward AI-driven operations as businesses deploy automation technologies to optimize processes and reduce expenses, fundamentally altering traditional employment models.