HP Prepares to Cut 6,000 Jobs as Part of AI-Driven Restructuring
HP Prepares to Cut 6,000 Jobs as Part of AI-Driven Restructuring
HP (Hewlett-Packard) has announced plans to eliminate 4,000 to 6,000 employees over the next three years, responding to mounting cost pressures in the global technology market, weakening revenue expectations, and a drive to increase automation within company operations. The decision was announced alongside profit guidance that fell short of expectations for fiscal year 2026, bringing greater clarity to the scope of HP's restructuring process. These cuts represent approximately 11 percent of the company's total workforce.
CEO Enrique Lores emphasized in his statement that artificial intelligence (AI) sits at the center of HP's future growth strategy. According to Lores, the company aims to deploy AI applications more intensively to accelerate product innovation, enhance customer satisfaction, and boost internal efficiency. As part of this transformation, HP will implement layoffs across a broad range of units, from development teams to operations and customer support divisions.
Lores also addressed the financial implications of this transformation. The company anticipates that its new AI-enabled business model could deliver annual savings of 1 billion dollars by 2028. However, near-term costs are significant: the layoffs and restructuring process are expected to burden HP with approximately 650 million dollars. This demonstrates that the technology giant is carefully balancing long-term productivity targets with near-term financial pressures.
HP's decision underscores the accelerating impact of AI automation on the workforce on a global scale. According to a report prepared by the McKinsey Global Institute, approximately 40 percent of jobs in the United States alone are susceptible to automation by AI across a broad spectrum ranging from education and healthcare to law and business. Technology companies like HP stand out as both leading adopters and affected actors in this transformation.
HP had already carried out a reduction of 1,000 to 2,000 employees in February 2025. That move was part of a broader restructuring and cost-reduction initiative. However, the November 26 announcement reveals that the scale of AI-focused transformation is far more substantial. The company was already under pressure from declining demand during the post-COVID normalization period in printer and computer sales. Now, AI integration appears aimed at sustaining operations at lower costs during periods of weak demand.
The company is expected to drive innovation in coming periods through AI-accelerated product development processes, predictive design, automated customer support, manufacturing optimization, and supply chain visibility. This represents a shift for HP from a traditionally hardware-focused technology company to a far more software and data-centric organizational model.
Additionally, increased AI investments are planned to position HP more agilely in the intensely competitive PC and printer markets. However, the effects of job cuts could generate debate both among employees and regarding the social dimensions of this transformation. Management asserts that integrating AI into business models is an unavoidable step for the company to "prepare for the future."
In conclusion, HP is rolling out an AI-centered productivity strategy in response to current market contraction. However, this strategy—driven by both workforce reduction decisions and technology-focused restructuring steps—will significantly shape the company's next three years.
Key Points
HP will cut 4,000 to 6,000 employees by 2028.
The decision was announced alongside profit guidance that missed expectations.
CEO Enrique Lores said AI will be critical for product innovation and efficiency.
The restructuring aims to achieve annual savings of 1 billion dollars.
The cuts are expected to incur 650 million dollars in near-term costs.
According to McKinsey, 40 percent of U.S. jobs are susceptible to AI automation.
HP experienced a reduction of 1,000 to 2,000 employees earlier in the year.
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News Link: https://www.supplychainbrain.com/articles/42911-hp-to-cut-6-000-jobs-touts-savings-from-ai
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Author: SedatOnat.com
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