- 4,000 to 6,000 jobs to be cut in HP’s latest cost-cutting move
- HP hopes AI will fill gaps – AI PCs have already proven themselves
- Revenue for the full year was only up 3.2%, shares are still down from last year.
HP announced it would cut 4,000 to 6,000 jobs as part of an ongoing cost-cutting initiative, largely driven by productivity gains from AI.
The company’s CEO, Enrique Lores, confirmed the workforce reduction as part of the company’s recent fourth-quarter results, acknowledging the company’s “future-ready” program it launched in 2022, as part of HP’s “2026 Tax Plan.”
Although it has already achieved more than $1.4 billion in savings from the program, Lores said further reductions would be necessary against the backdrop of a 3.2% increase in full-year revenue and a slightly higher 4.2% increase in quarterly revenue.
HP continues to reduce its workforce
HP has already sent 2,000 workers to 2025 (per layoffs.fyi), and these latest plans to further reduce the global workforce are expected to come to fruition by 2028.
“The company estimates it will incur approximately $650 million in labor and non-labor costs related to restructuring and other charges, including approximately $250 million in fiscal 2026,” HP confirmed.
Product development, customer service and operational processes will be among the roles most likely to be affected, with AI stepping in to fill the gaps left by departing workers.
HP also noted that the use of AI PCs within the company increased team productivity by 16% and confirmed that it would “invest in AI-enabled initiatives to accelerate product innovation, improve customer satisfaction and increase productivity.”
More generally, HP is also concerned about the rising cost of memory, which now represents 15 to 18% of the cost of a traditional PC.
The decline in print, particularly among consumers, has also led to poor performance. Net printing revenue decreased by 4% year-on-year.
Company stocks are largely unaffected by the announcement, but fluctuations from last month continue. Shares have fallen 20% over the past 12 months, but after bottoming out over the summer, the past six months have seen something of a resurgence.
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