HP to Cut Thousands of Jobs as Artificial Intelligence Push Intensifies

HP Inc plans to reduce its global workforce by between 4000 and 6000 employees by 2028 as it accelerates the integration of artificial intelligence technology across its operations. The initiative is designed to streamline the company’s structure, speed up product development, enhance customer satisfaction and boost productivity. According to chief executive Enrique Lores, the programme is expected to generate 1 billion dollars in gross run rate savings over three years.

Teams focused on product development, internal operations and customer support will be most affected by the restructuring. The move follows an earlier round of job losses in February, when HP Inc cut an additional 1000 to 2000 employees. These changes are part of a broader plan for efficiency amid evolving market demands. HP Inc, which currently employs approximately 58000 people worldwide, was formed in 2015 when Hewlett Packard was divided into two separate companies, HP Inc and Hewlett Packard Enterprise.

The demand for PCs enabled with artificial intelligence technology has increased rapidly, now accounting for over 30 per cent of HP’s shipments in its fourth quarter to October. However, growing interest in artificial intelligence is also having wider market effects. The global price of memory chips continues to rise, driven by the demand for data centre infrastructure that supports artificial intelligence. According to analysts at Morgan Stanley, continuing competition in the server market has triggered higher prices for dynamic random access memory and NAND, both commonly used memory chips.

Lores noted that HP expects to feel the impact of rising memory chip prices during the second half of its 2026 financial year. He stated that the company is taking a prudent approach for the latter half of the year by qualifying lower cost suppliers, reducing memory configurations and enacting price adjustments. HP retains sufficient inventory to meet demand during the first half of the year, but it is preparing for cost pressures ahead.

Despite these challenges, revenue for HP’s fourth quarter reached 14.64 billion dollars, exceeding market expectations. Shares in HP fell by over five per cent in afterhours trading following the announcement. HP’s actions reflect the broader trend among technology firms to invest heavily in artificial intelligence capabilities, while simultaneously seeking efficiencies through automation and cost control as the sector contends with changing supply chain conditions and market pressures.