HP’s Bold AI Move: 6,000 Jobs Cut for Future Competitiveness

HP has unveiled a comprehensive workforce reduction program eliminating 4,000 to 6,000 positions globally by the end of October 2028. The California-based computer and printer manufacturer employs approximately 56,000 people worldwide, and the cuts reflect its strategic pivot toward artificial intelligence integration across product development, operations, and customer service.
Product development areas, internal operations, and customer support functions will bear the primary burden of the planned reductions. HP expects to incur $650 million in restructuring expenses while positioning the company to achieve $1 billion in annual savings by 2028. These layoffs follow previous reductions of 1,000 to 2,000 employees implemented in February, demonstrating sustained organizational transformation.
HP’s financial performance shows strength in revenue generation, with fourth-quarter sales totaling $14.6 billion and surpassing market expectations. The company has successfully captured growing demand for AI-enabled computers, which comprised over 30% of shipments in the quarter concluding October 31. This market segment continues experiencing robust growth as technology adoption accelerates.
However, profit outlook concerns have emerged in HP’s forward guidance. The company forecasts adjusted earnings per share between $2.90 and $3.20 for the upcoming year, substantially below analyst expectations of $3.33. Rising memory chip costs driven by datacenter demand for AI infrastructure have significantly impacted production expenses, with memory components now accounting for 15-18% of PC costs. Trade tariffs add additional financial pressure.
Investors responded unfavorably to the news, driving HP shares down 6%. The company’s strategy reflects broader industry trends as organizations increasingly adopt artificial intelligence and automation technologies to enhance competitiveness and reduce operational costs, despite significant workforce displacement across the technology sector.