HP has revealed a restructuring initiative that will result in the elimination of between 4,000 and 6,000 positions globally by the end of October 2028. The plan represents the company’s latest effort to adapt its business model to incorporate artificial intelligence technologies across multiple operational areas.
From its California headquarters, HP’s leadership explained that AI integration offers substantial opportunities to transform how the company operates. Chief Executive Enrique Lores noted that embedding these technologies into product development, internal processes, and customer support functions will accelerate innovation, improve customer satisfaction, and enhance productivity. The initiative is projected to deliver $1 billion in annual savings by 2028, against implementation costs of approximately $650 million.
The workforce reduction will affect various departments across HP’s approximately 56,000-person organization. Product development teams, internal operations staff, and customer support personnel will experience the most significant changes. This announcement follows an earlier restructuring in February that eliminated between 1,000 and 2,000 positions, indicating an ongoing transformation of the company’s operational structure.
Financial considerations are playing a major role in HP’s strategic planning. The company issued a profit forecast for the coming year that disappointed market analysts, projecting adjusted net earnings per share between $2.90 and $3.20 versus expectations of $3.33. Multiple factors are pressuring margins, including new trade tariff costs and rapidly escalating prices for memory chips used in computer manufacturing.
Market dynamics in the semiconductor industry are creating challenges for PC makers. Memory chip prices have risen faster than anticipated due to intense competition for components needed in AI datacenter infrastructure. These chips now represent 15% to 18% of typical PC costs and continue climbing. Despite these pressures, HP achieved strong fourth-quarter revenue of $14.6 billion, bolstered by growing demand for AI-capable computers, which accounted for over 30% of recent shipments. The stock market responded negatively to the workforce reduction news, with shares falling up to 6%.