HP Is Cutting Up to 10% of Its Workforce Due to AI

HP plans to cut between 4,000 and 6,000 jobs by the end of its fiscal year 2028 as part of a broader push to implement AI in its operations. HP CEO Enrique Lores said the cuts will affect teams working on product development, customer support and internal operations.

The computer and printer maker employed 58,000 people as of October 2024, according to Stock Analysis, which means the layoffs could represent around 10% of its workforce.

HP estimates that it will save approximately $1 billion by 2028 as it puts the job cuts into effect. The company says it will shoulder $650 million in restructuring costs, with about $250 million of the expense taking place in fiscal year 2026.

Shares of HP fell nearly 6% in extended trading on Tuesday following the news. The stock was down over 2.5% on Wednesday.

Related: Apple Conducted Rare Layoffs Focused on One Specific Team

Lores said that the cuts are not just about reducing costs, but about “disciplined execution.”

“As we accelerate innovation across AI-powered devices to drive productivity, security and flexibility for our customers, our focus for FY26 is on disciplined execution,” Lores said in a statement. “We are committed to driving measurable results — ensuring that our plans translate into long-term value for our shareholders.”

The layoff announcement arrived alongside HP’s financial results for the fiscal year 2025. Annual revenue was up 3.2% year-over-year, hitting $55.3 billion. Fourth quarter net revenue was $14.6 billion, up 4.2% and marking HP’s sixth consecutive quarter of revenue growth.

HP laid off 1,000 to 2,000 workers in February as part of a separate restructuring plan.

According to an earnings presentation viewed by Fox Business, HP’s strategy is to drive “artificial intelligence adoption and enablement” while reducing costs, partly through “workforce reductions.”

Related: AI and Cost-Cutting Lead to the Worst October Layoffs in 22 Years

Reuters reported that during a media briefing call this week, Lores said HP started rolling out AI pilots two years ago to drive productivity and customer service.

“What we have learned is that we need to start from redesigning the process, and once we know how the process could be redone using AI, using agentic AI, it can really have a very significant impact,” Lores said on the call.

Agentic AI is AI that can act with little to no human intervention to make decisions, carry out plans and take action. Companies are already using it to get work done faster. Services firm Capita announced earlier this year that it has used agentic AI on more than 200 recruitment tasks to accelerate hiring.

A McKinsey report released on Tuesday found that AI can already automate 57% of all U.S. work hours, but this represents the automation of tasks, not the elimination of jobs. AI can take over repetitive tasks, but human skills like judgment and emotional intelligence will remain crucial to the future of work, according to the researchers.

HP plans to cut between 4,000 and 6,000 jobs by the end of its fiscal year 2028 as part of a broader push to implement AI in its operations. HP CEO Enrique Lores said the cuts will affect teams working on product development, customer support and internal operations.

The computer and printer maker employed 58,000 people as of October 2024, according to Stock Analysis, which means the layoffs could represent around 10% of its workforce.