HP’s Route to Profitability Eliminates 6,000 Employee Positions

Computer and printer manufacturer HP has announced plans to reduce its global workforce by 4,000 to 6,000 employees by October 2028, representing approximately one-tenth of its 56,000-person organization. Chief Executive Enrique Lores characterized the move as necessary for integrating artificial intelligence across operations to accelerate innovation and boost productivity.
Product development teams, internal operations staff, and customer support departments will experience the most significant impact from the planned workforce reductions. HP expects to incur $650 million in restructuring costs while positioning the company to achieve $1 billion in annual savings by 2028. These reductions follow earlier layoffs of 1,000 to 2,000 employees in February, indicating ongoing organizational transformation.
Financial results reveal strong revenue performance, with HP exceeding analyst expectations by posting $14.6 billion in fourth-quarter sales. The company has achieved significant market penetration with AI-capable personal computers, which accounted for more than 30% of shipments during the quarter ending October 31. Demand for AI-integrated computing solutions continues accelerating across markets.
However, profitability projections disappointed market analysts. HP forecasts adjusted earnings per share between $2.90 and $3.20 for the upcoming year, significantly below the consensus estimate of $3.33. Escalating memory chip costs driven by datacenter demand for AI infrastructure have substantially increased production expenses, with memory now representing 15-18% of typical PC costs. Trade tariffs add additional pressure on profit margins.
Market response proved negative, with HP shares declining 6% after the announcement. The company’s strategy mirrors broader industry trends as organizations increasingly adopt artificial intelligence and automation technologies to optimize operations and reduce costs, despite the significant human impact of workforce displacement.