HP Embraces AI Automation Despite 6,000-Job Human Cost

HP has announced a workforce reduction program eliminating 4,000 to 6,000 employees worldwide by the end of October 2028. The California technology giant employs approximately 56,000 people, and the cuts reflect its strategic commitment to integrating artificial intelligence across operations to accelerate innovation, improve customer experiences, and boost productivity.
Product development areas, internal operations, and customer support functions will bear the primary burden of the planned reductions. HP anticipates spending $650 million on restructuring while achieving $1 billion in annual cost savings by 2028. These layoffs follow previous reductions of 1,000 to 2,000 employees implemented in February, indicating sustained organizational transformation.
Revenue performance demonstrates HP’s market strength, with fourth-quarter sales reaching $14.6 billion and surpassing analyst estimates. The company has successfully penetrated the AI-enabled computer market, with these advanced products comprising over 30% of shipments in the quarter concluding October 31. Demand for AI-integrated technology continues accelerating across markets.
However, earnings guidance presented challenges. HP forecasts adjusted net earnings between $2.90 and $3.20 per share for the upcoming year, substantially below analyst expectations of $3.33. Rising memory chip costs driven by datacenter demand for AI infrastructure have significantly impacted production expenses, with memory components now accounting for 15-18% of PC costs. Trade tariffs add further pressure on profitability.
Market reaction proved sharply negative, with HP shares falling 6% following the announcement. The company’s strategy reflects broader industry trends as organizations increasingly deploy AI and automation technologies to streamline operations and reduce costs, fundamentally altering traditional employment models despite the human impact.