HP’s AI Ambitions Lead to 6,000 Workers Losing Their Jobs

Technology manufacturer HP has committed to eliminating between 4,000 and 6,000 positions worldwide by October 2028 as part of its strategic shift toward artificial intelligence. The workforce reduction affects approximately 11% of the California company’s 56,000 employees, with CEO Enrique Lores emphasizing AI’s critical role in accelerating product development and improving customer satisfaction.
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 1,000 to 2,000 positions in February.
Financial results show HP exceeding revenue expectations, with fourth-quarter sales reaching $14.6 billion. The company has captured considerable market share in AI-enabled computers, which represented more than 30% of shipments during the quarter ending October 31. This segment continues experiencing robust growth as technology adoption accelerates across consumer and enterprise markets.
However, profitability projections concerned 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 unfavorably to the announcement, with HP shares declining 6%. The company’s strategy exemplifies broader industry trends as organizations increasingly deploy AI and automation technologies to optimize operations and reduce expenses, despite the significant human cost of workforce displacement across the sector.