In a strategic move toward greater operational efficiency, HP will reduce its global workforce by up to 6,000 employees over the next three years. The technology company’s leadership views artificial intelligence as a transformative tool that will reshape how it develops products, serves customers, and manages internal processes.
The restructuring plan, which will unfold through October 2028, is designed to unlock $1 billion in yearly cost savings once fully implemented. However, achieving this goal will require an upfront expenditure of approximately $650 million. Chief Executive Enrique Lores emphasized that embedding AI throughout the organization represents a significant opportunity to enhance product innovation, customer satisfaction, and overall productivity.
HP’s announcement comes against a backdrop of broader industry concerns about AI’s impact on employment. Recent research suggests millions of jobs globally could be affected by automation and AI technologies in the coming decade. Low-skilled positions in trades, machine operations, and administrative functions appear particularly vulnerable, though the impact will extend across numerous sectors including education, healthcare, business, and legal services.
The company’s financial outlook reflects multiple pressures facing technology manufacturers. Rising memory chip costs, driven by intense competition for components needed in AI datacenters, are squeezing profit margins. Memory expenses now represent 15% to 18% of typical PC costs, with price increases accelerating beyond initial expectations. Additionally, trade tariff impacts are contributing to the cautious profit forecast.
Despite these headwinds, HP reported encouraging fourth-quarter revenue of $14.6 billion and strong consumer interest in AI-capable computers. These next-generation devices comprised more than 30% of the company’s PC shipments in the most recent quarter. The workforce reduction announcement already affected by an earlier 2,000-employee cut in February, signals HP’s commitment to repositioning itself for an AI-driven technology landscape.