HP is preparing for a significant organizational transformation that will see its workforce reduced by up to 6,000 employees through October 2028. The restructuring is part of the technology company’s strategy to leverage artificial intelligence for improving operational efficiency and product development capabilities.
The company’s CEO, Enrique Lores, outlined a vision where AI is embedded throughout the organization to accelerate innovation, enhance customer experiences, and boost productivity. Teams working on product development, internal operations, and customer support will be most affected by the changes. The initiative is expected to generate approximately $1 billion in annual savings once complete, though it will require an initial investment of around $650 million.
This workforce adjustment follows an earlier reduction of 1,000 to 2,000 positions in February, suggesting HP is in the midst of a multi-year transformation. The company joins numerous other major employers across various industries that have announced staff reductions while citing AI adoption as a contributing factor. The trend reflects growing confidence among business leaders that AI technologies can effectively handle tasks previously requiring human workers.
HP’s financial performance presents a contrasting picture of challenges and opportunities. The company reported impressive fourth-quarter revenues of $14.6 billion, exceeding analyst expectations. Particularly encouraging is the strong demand for AI-enabled personal computers, which represented more than 30% of HP’s shipments in the quarter ending October 31, demonstrating robust consumer interest in next-generation computing devices.
However, the outlook for the coming year is more cautious. HP projects adjusted net earnings per share between $2.90 and $3.20, falling short of the $3.33 analysts anticipated. This conservative forecast reflects multiple pressures, including costs associated with trade tariffs and dramatically rising prices for memory chips. These semiconductor components, essential for AI datacenter operations, have experienced accelerated price increases due to intense industry competition, creating margin pressure for computer manufacturers. Investors responded to the mixed news by pushing HP shares down as much as 6%.