In a move reflecting broader industry trends, HP will reduce its workforce by between 4,000 and 6,000 employees over the next three years. The technology company is increasingly turning to artificial intelligence to handle functions traditionally performed by human workers, particularly in areas such as product development, operations, and customer service.
The restructuring plan extends through October 2028 and is designed to generate $1 billion in annual cost savings once fully implemented. CEO Enrique Lores emphasized that integrating AI throughout the organization presents significant opportunities for improving innovation speed, customer experiences, and operational efficiency. The transformation will require an upfront investment of approximately $650 million.
HP’s announcement adds to a growing list of major employers citing AI adoption when announcing workforce reductions. Law firms, consulting companies, and financial services organizations have all recently announced staff cuts attributed partly to new technologies. Some companies report that departing employees are being replaced by AI systems and automation rather than new hires, suggesting a fundamental shift in how businesses approach staffing.
Industry research paints a stark picture of AI’s potential impact on employment. Studies suggest that significant percentages of work hours across multiple sectors could be automated using currently available technologies. Administrative and legal services appear particularly vulnerable, with tasks involving data entry, document preparation, and financial processing increasingly handled by AI systems. Physical labor in dangerous occupations may similarly be replaced by robotic systems.
HP’s financial results present a mixed picture. While fourth-quarter revenues of $14.6 billion exceeded expectations and AI-enabled PCs represented over 30% of shipments, the company provided a cautious outlook for the year ahead. Projected earnings fell below analyst forecasts, reflecting anticipated impacts from trade tariffs and sharply rising memory chip costs. These components have become more expensive as technology companies compete for supplies needed to build AI infrastructure, creating margin pressure for PC manufacturers.