HP has announced a substantial workforce reduction affecting 4,000 to 6,000 employees worldwide by the end of October 2028. The cuts represent approximately one-tenth of the California company’s 56,000-person workforce and reflect its strategic commitment to integrating artificial intelligence across operations to drive innovation and efficiency improvements.
Product development areas, internal operations, and customer support functions will experience the most significant impact from the planned reductions. HP anticipates spending $650 million on restructuring while achieving $1 billion in annual cost 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 competitive position, with fourth-quarter sales totaling $14.6 billion and exceeding analyst estimates. The company has successfully captured market share in AI-enabled computers, which represented more than 30% of shipments in the quarter ending October 31. This segment continues experiencing significant growth as technology adoption accelerates.
However, profitability projections presented challenges for investors. HP forecasts adjusted earnings per share between $2.90 and $3.20 for the upcoming year, falling below analyst expectations of $3.33. Soaring memory chip prices driven by datacenter demand for AI infrastructure have pushed memory costs to 15-18% of PC production expenses. Trade tariffs add further pressure on profit margins.
Stock markets reacted negatively, with HP shares declining 6% after the announcement. The company’s strategy exemplifies broader industry trends as organizations increasingly leverage artificial intelligence and automation to optimize operations and reduce expenses, despite the significant human cost of workforce displacement.
