California technology giant HP has announced a substantial workforce reduction affecting 4,000 to 6,000 employees worldwide by October 2028. The decision impacts approximately 11% of HP’s 56,000-person workforce and forms part of a broader strategy to integrate artificial intelligence across operations, with leadership emphasizing AI’s capacity to drive innovation and efficiency.
Product development teams, internal operations staff, and customer support departments will experience the most significant impact from the planned cuts. HP anticipates spending $650 million on restructuring while positioning the company to realize $1 billion in annual savings by 2028. These layoffs represent the second major workforce reduction this year, following the elimination of 1,000 to 2,000 positions in February.
Revenue performance demonstrates HP’s market strength, with fourth-quarter sales reaching $14.6 billion and surpassing analyst estimates. The company has successfully capitalized on growing demand for AI-capable computers, which accounted for more than 30% of shipments in the quarter ending October 31. This segment continues experiencing robust growth as technology adoption accelerates.
However, earnings guidance disappointed investors. 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 have substantially increased production expenses, with memory now representing 15-18% of typical PC costs. Trade tariffs add further pressure on profitability.
The announcement triggered a 6% decline in HP stock value. The company’s workforce transformation exemplifies broader industry trends as businesses increasingly deploy AI and automation technologies to streamline operations and reduce costs, fundamentally altering employment patterns across the technology sector.