In a significant strategic pivot toward artificial intelligence, HP Inc. has announced plans to reduce its global workforce by 4,000 to 6,000 employees by the end of its 2028 fiscal year.[1][2] This move is a core component of a broad restructuring effort designed to streamline operations and generate approximately $1 billion in gross annual savings.[1][2] The workforce reduction underscores a growing trend across the technology sector where companies are realigning their resources and personnel to capitalize on the transformative potential of AI.[1] The planned cuts, which could affect up to 10% of HP's roughly 58,000 employees as of October 2024, are part of what the company is calling its "2026 Financial Plan.[3][4][5] This initiative aims to enhance productivity, accelerate product innovation, and improve customer interactions through the aggressive adoption and integration of artificial intelligence.[6]

HP's leadership has positioned the restructuring not merely as a cost-cutting measure, but as a fundamental redesign of its operational processes.[7] CEO Enrique Lores stated that the company will embed AI into "everything they do," explaining that preliminary pilots have demonstrated that redesigning processes with AI can have a "very significant impact."[2] The initiative is expected to simplify the company's organizational structure, allowing for greater investment in AI-driven products and services.[1] The roles most affected by these changes will be in product development, internal operations, and customer support.[6][8][4] This decision follows a period of rising operational costs and is a direct response to changing market conditions, including the increasing demand for AI-enabled personal computers.[1] In the fourth quarter ending October 31, shipments of AI-driven PCs already accounted for more than 30% of HP's total shipments, signaling a clear market shift that the company is eager to lead.[6][8]

The financial implications of this strategic shift are substantial. While the goal is to achieve $1 billion in gross run rate savings over three years, the restructuring process itself will incur significant upfront costs.[1][4] HP anticipates approximately $650 million in restructuring and other charges, with about $250 million of that expected in the 2026 fiscal year.[6][2][3] This announcement was made alongside the company's latest earnings report, which showed a 3.2% increase in net income for the 2025 fiscal year, reaching $55.3 billion, with fourth-quarter revenue of $14.6 billion surpassing analyst expectations.[6] However, the company's profit forecast for the 2026 fiscal year, with adjusted earnings per share projected between $2.90 and $3.20, fell slightly below market forecasts, partly due to anticipated pressures from rising global memory chip prices.[6][3]

The move by HP is emblematic of a larger industry-wide reckoning with the impact of artificial intelligence on corporate strategy and workforce composition.[2] Major technology firms are increasingly investing heavily in generative AI, viewing it as a critical tool to redesign workflows, automate tasks, and launch new product lines.[1] This often involves difficult decisions about personnel, as companies seek to shed roles that can be automated while investing in talent that can develop and manage AI systems. The transition is creating a period of uncertainty for thousands of employees across the sector.[1] While the promise for customers includes more advanced products and smarter support systems, the transitional phase may lead to service fluctuations as new tools and processes are implemented.[1] The trend has also sparked a broader policy debate about how to support workers who are displaced by automation and how corporations should manage such large-scale reorganizations.[1] HP's multi-year plan highlights a long-term vision where AI is not just a feature in its products but a core driver of its entire business operation, from internal efficiency to customer-facing solutions.