Computer and printer manufacturer HP has outlined plans to reduce its global workforce by 4,000 to 6,000 employees by the end of October 2028. The cuts affect approximately 11% of the company’s 56,000-employee base and reflect CEO Enrique Lores’s strategic commitment to embedding artificial intelligence throughout the organization to accelerate innovation and boost efficiency.
Product development areas, internal operations, and customer support functions will experience the most significant impact from the planned reductions. HP expects to spend $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 up to 2,000 positions in February.
Revenue performance demonstrates HP’s competitive strength, with fourth-quarter sales reaching $14.6 billion and surpassing analyst estimates. The company has successfully penetrated the AI-enabled computer market, with these advanced products representing more than 30% of shipments in the quarter ending October 31. Consumer and enterprise demand for AI-integrated technology continues expanding rapidly.
However, profit outlook concerns have dampened investor enthusiasm. 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 profitability margins.
Stock markets reacted unfavorably to the announcement, with HP shares falling 6%. The company’s strategy exemplifies broader industry trends as organizations increasingly adopt artificial intelligence and automation technologies to streamline operations and reduce expenses, despite significant workforce displacement across the sector.