HP Plans Workforce Cuts of Up to 6,000 by 2028 to Embrace AI

HP Inc. announced plans to reduce its workforce by as many as 6,000 employees by the end of 2028. This decision is part of a significant initiative aimed at integrating artificial intelligence across its operations and streamlining its processes. The company’s restructuring could impact nearly 10% of its global workforce, as reported by Stock Analysis.

Following the announcement, HP’s shares dropped by 5.5% in extended trading, reflecting investor concerns regarding the impending job cuts. The company aims to achieve approximately $1 billion in gross cost savings by the conclusion of fiscal year 2028, while expecting to incur $650 million in restructuring costs. Of this amount, $250 million is projected to be spent during fiscal year 2026.

Strategic Shift Towards AI

According to HP’s President and CEO Enrique Lores, the workforce reduction is part of a broader transformation of the company’s operational model, rather than a mere cost-cutting measure. He emphasized the need to “accelerate innovation across AI-powered devices” to enhance productivity, security, and flexibility for customers. During a recent media briefing, Lores outlined that the integration of AI is crucial for redesigning business strategies.

HP has been piloting programs focused on utilizing AI to improve a variety of processes. Insights gained from these initiatives indicate that for AI to yield significant benefits, a comprehensive redesign of existing processes is necessary. Once this foundation is established, technologies such as generative AI could lead to transformative changes within the company.

In February, HP had already undertaken workforce reductions, eliminating 2,000 positions as part of an earlier restructuring plan, according to data from layoffs.fyi. The latest announcement coincided with the release of HP’s fiscal year 2025 financial results, which revealed a 3.2% year-over-year increase in annual revenue, reaching $55.3 billion. Despite this growth, the company reported a 5.7% decline in GAAP earnings per share during the same period.

Future Focus and Market Dynamics

Looking ahead, HP’s strategy for fiscal year 2026 emphasizes disciplined execution. Lores stated that the company’s commitment to managing the transition carefully is vital for achieving the financial goals associated with the restructuring plan. Alongside workforce reductions, HP will consolidate various programs to enhance cost savings.

The adoption of AI is central to HP’s strategy for improving customer experiences and driving product innovation. By leveraging AI, HP aims to create more efficient processes, which it hopes will enhance competitiveness in the market.

As the private sector added 42,000 jobs in October, according to ADP, HP’s workforce adjustments occur against a complex backdrop of economic dynamics. The company continues to explore how AI can boost productivity and efficiency, particularly through generative AI. This transition marks a significant shift for HP, and its success will depend on the effective implementation of these changes.

HP is navigating a challenging landscape as it embraces an AI-driven business model. The company’s ability to balance workforce adjustments with its innovation goals will be crucial in the coming years.