HP Workforce Shakeup Signals AI Priority

HP Inc. is betting big on artificial intelligence - and thousands of employees will pay the price. The computing giant announced plans to cut between 4,000 and 6,000 jobs worldwide by late 2028 as it aggressively pursues AI integration across its operations.

The Human Cost of Automation

The layoffs, affecting about 10% of HP's global workforce, will ripple through product development teams, internal operations, and customer support departments. CEO Enrique Lores framed the painful cuts as necessary medicine: "We're fundamentally reshaping how we work," he told analysts. "AI changes everything from how we design products to how we serve customers."

The company expects these workforce reductions to yield about $1 billion in annual savings once fully implemented. But getting there won't be cheap - HP anticipates spending roughly $650 million on severance packages and restructuring costs.

Financial Balancing Act

HP's latest earnings reveal a company caught between growth and transformation pressures:

• Revenue: Up 3.2% year-over-year to $55.3 billion
• Q4 Sales: $14.6 billion (beating analyst forecasts)
• Projections: Fiscal 2026 EPS between $2.90-$3.20 (below Wall Street's $3.33 expectation)

The mixed financial picture comes as HP navigates turbulent tech markets. Memory chip prices continue climbing industry-wide, particularly for DRAM and NAND components used in PCs and printers.

"We're seeing significant cost pressures," Lores admitted during the earnings call. To cope, HP plans strategic adjustments including reduced memory configurations in some devices and supplier negotiations.

AI Gains Traction

The restructuring comes as AI already influences nearly one-third of HP's PC shipments - a figure that surprised some analysts with its rapid adoption rate.

Industry watchers see HP's moves as part of broader tech sector trends:

• Dell recently announced similar job cuts tied to efficiency initiatives
• Microsoft continues expanding its AI-powered Copilot features across products
• Chipmakers like Nvidia reap record profits supplying AI hardware components

For affected employees receiving pink slips this holiday season, these macro trends offer little comfort.

Key Points:

• Workforce Reduction: Cutting up to 6,000 jobs through 2028
• Financial Impact: Targets $1B annual savings; faces $650M restructuring bill
• Market Challenges: Rising component costs squeeze margins despite revenue growth
• AI Adoption: Already drives over 30% of recent PC shipments