HP Announces Up to 6,000 Job Cuts Amid Shift to AI-Powered Efficiency

One of HP's largest reorganisation initiatives in recent memory is about to begin. As part of a comprehensive cost-cutting initiative designed to make the company leaner and more competitive in the era of artificial intelligence, the computer and printer giant revealed intentions to eliminate between 4,000 and 6,000 jobs worldwide by fiscal 2028.

The company's operations will be reshaped, and AI tools will be increasingly integrated throughout product development, customer support, and manufacturing. CEO Enrique Lores calls the move a "necessary step to stay competitive." Investors were less excited, though, as HP's stock fell 5.5% in prolonged trade after the news.

The Move Could Mint $1 Bn Annually for HP

By 2028, HP anticipates saving $1 billion a year under the new plan, mostly through the automation and optimisation of various business processes through artificial intelligence. According to Lores, the corporation must do this in order to maintain its competitiveness, as reported by Bloomberg.

AI tools will be used in manufacturing, sales, customer support, and product creation in an effort to boost efficiency and customer experience while accelerating innovation. Lores highlighted that the company's reorganisation is a long-term strategy to protect HP from technological upheaval, not merely a response to market conditions.

Who will be Affected with the Recent Layoffs?

Lores revealed in a media briefing that the layoffs will impact teams in internal operations, customer service, and product development. HP has reduced its staff on previous occasions. As part of a previous cost-cutting strategy, the corporation let go of another 1,000 to 2,000 workers earlier this year. However, the additional layoffs signify a more vigorous drive for efficiency and automation. HP is hopeful about development in its AI PC area, where demand is still skyrocketing, despite the job losses. According to the firm, over 30% of all shipments for the fourth quarter that ended on October 31 were AI-enabled laptops.

As consumers and organisations look for computers that can run on-device AI models for productivity and creativity, these next-generation PCs are predicted to become a major source of income. Rising component costs present new financial hurdles for HP even as it relies on AI to reduce expenses. Morgan Stanley analysts have cautioned that the need for AI infrastructure may drive a global spike in memory chip prices, which could put pressure on profit margins for PC manufacturers such as HP, Dell, and Acer.

As Big Tech companies compete to increase the capacity of their data centres, the cost of NAND chips and dynamic random-access memory (DRAM), which are necessary for both PCs and servers, is rising. Although HP presently has adequate stock to handle the short term, Lores stated that the business expects to suffer this impact by the second half of fiscal 2026.