At a Glance

  • HP Inc. said Tuesday it expects to reduce its global workforce by 4,000 to 6,000 employees by the end of fiscal 2028. Details of the plan are outlined in the company'sofficial press release。
  • The Palo Alto, California-based personal computer and printer maker said in the release that the job cuts are part of an overall plan to "drive customer satisfaction, product innovation, and productivity through the adoption and enablement of AI."
  • The press release noted that by the end of fiscal 2028, the job cuts are expected to result in approximately $1 billion in "gross annualized run-rate cost savings." The company also estimated labor and non-labor costs related to restructuring and other charges at approximately $650 million, with about $250 million expected to be incurred in fiscal 2026.

In-Depth Analysis

HP is one of several major tech companies this year to announce significant layoffs as they restructure their workforce amid accelerated investments in artificial intelligence.

According to a recent study by Economist Impact, the research arm of The Economist Group, 42% of chief financial officers believe reducing headcount is the most direct way for AI investments to generate returns. However, nearly the same proportion (43%) disagreed, arguing that using layoffs as a metric is too narrow and may lack long-term vision.

Separately, a report released this month by career transition firm Challenger, Gray & Christmas showed U.S. employers announced 153,074 total job cuts in October, a 175% surge from the same period last year, partly due to AI-driven automation. Among private-sector employers, cost cutting was the top reason for October layoffs, with 50,437 cuts announced; AI ranked second, leading to 31,039 job losses. In the first ten months of this year, AI was cited as a reason for 48,414 job cuts.

HP's layoff announcement coincided with its release of fourth-quarter fiscal 2025 earnings for the period ending October 31. The company reported total quarterly revenue of $55.3 billion, up 3.2% year-over-year.

"Our fourth quarter and fiscal 2025 results reflect strong execution in a challenging trade environment, with continued sequential improvement in the second half of the year, as we had committed," HP Chief Financial Officer Karen Parkhill said on Tuesday's earnings call, held on the day of the report's release.

According to the finance executive, revenue from AI-enabled personal computers doubled year-over-year. Looking ahead, the tech giant sees "significant opportunity to embed AI across nearly every part of our business to drive productivity, accelerate innovation, and improve customer experience," Parkhill added.

Meanwhile, HP CEO Enrique Lores said on the call that the company is considering "aggressive measures," such as raising product prices, in response to escalating inflationary pressures.

"Memory costs currently represent 15% to 18% of the cost of a typical personal computer, and while an increase was anticipated, the pace of that increase has accelerated in recent weeks," he said.