HP has confirmed it will cut between 4,000 and 6,000 jobs globally as part of its ongoing restructuring program, citing productivity improvements driven by artificial intelligence.
The announcement was made during the company’s latest Q4 earnings call, where CEO Enrique Lores reiterated that workforce reductions remain a core part of HP’s “future-ready” initiative. The program launched in 2022 and sits within HP’s broader fiscal 2026 plan.
Despite delivering more than $1.4 billion in savings so far, HP says additional cuts are necessary even as revenue trends remain modestly positive.
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Revenue growth fails to offset cost pressures
HP reported a 3.2% increase in full-year revenue and a 4.2% rise in quarterly revenue. These gains were not enough to ease pressure on margins, according to leadership.
Lores confirmed the company expects to incur around $650 million in restructuring-related costs, including both labor and non-labor expenses. Roughly $250 million of that total will be recorded in fiscal year 2026.
The latest reductions follow earlier layoffs. Around 2,000 HP employees have already left the company in 2025, based on publicly available layoff tracking data.
The new cuts will be phased in gradually between now and 2028.
AI replaces roles across core business functions
HP says the layoffs will largely affect product development, customer service, and operational teams. These are areas where automation and AI-driven tools are being introduced to replace or reduce manual workloads.
The company claims internal use of AI-powered PCs has already improved employee productivity by around 16%.
HP says it will continue investing in AI initiatives aimed at speeding up product development, improving customer experience, and reducing operating costs.
This approach mirrors a wider trend across the tech sector, where AI adoption is increasingly tied to workforce reductions rather than expansion.
Hardware costs and printing decline add pressure
Beyond staffing changes, HP flagged rising component costs as another concern. Memory now accounts for roughly 15 to 18% of the cost of a typical PC, a figure the company expects to remain elevated.
The printing division also continues to struggle. Consumer printing demand declined again, with printing net revenue falling 4% year over year.
These structural challenges appear to be reinforcing HP’s push to streamline operations rather than grow headcount.
Market reaction remains muted
HP’s share price showed little immediate reaction to the announcement.
The stock remains down roughly 20% over the past 12 months, although it has recovered somewhat since hitting a low point during the summer. The past six months have shown gradual improvement, but investors appear cautious as the company balances AI-led efficiency gains against long-term growth uncertainty.
