HP is cutting up to 10% of its workforce because of AI

Himachal Pradesh plan to cut 4,000 to 6,000 jobs by the end of its fiscal year 2028 as part of a broader effort to implement AI across its operations. HP CEO Enrique Lores said the cuts would affect teams working on product development, customer support and internal operations.

Computer and printer manufacturers employed 58,000 people By October 2024, which means layoffs could represent about 10% of its workforce, according to stock analysis.

HP estimates it will save about $1 billion by 2028 as it makes the job cuts effective. The company says it will incur $650 million in restructuring costs, about $250 million of which will be incurred in fiscal 2026.

HP shares fell about 6% In extended trading on Tuesday after the news. had stock down more than 2.5% On Wednesday.

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

“As we accelerate innovation in AI-powered tools to enhance productivity, security and resiliency for our customers, our focus for fiscal 2026 is disciplined execution,” Lores said in a statement. statement“We are committed to driving measurable results – ensuring that our plans translate into long-term value for our shareholders,”

The announcement of layoffs came with HP itself financial result For financial year 2025. Annual revenue increased 3.2% year-over-year to $55.3 billion. Fourth quarter net revenue was $14.6 billion, up 4.2% and HP’s sixth consecutive quarter of revenue growth.

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

According to the earnings presentation seen by fox businessHP’s strategy is to boost “the adoption and enablement of artificial intelligence” while reducing costs, partly through “workforce reductions”.

Connected: AI and cost-cutting led to worst layoffs in 22 years in October

reuters It is reported that during a media briefing call this week, Lores said that HP began launching AI pilots two years ago to enhance productivity and customer service.

“What we’ve learned is that we need to start by redesigning the process, and once we figure out how to redesign the process using AI, using agentic AI, it can have a really significant impact,” Lores said on the call.

Agent AI is AI that can make decisions, carry out plans, and take actions with little or no human intervention. Companies are already using it to get the work done faster. Services firm Capita announced earlier this year that it had made greater use of agentic AI 200 recruitment jobs To speed up recruitment.

A McKinsey report Issued Tuesday found that AI can already automate 57% of all American work hours, but this represents the automation of tasks, not the elimination of jobs. According to researchers, AI can handle repetitive tasks, but human skills like judgment and emotional intelligence will remain important for the future of work.

Himachal Pradesh plan to cut 4,000 to 6,000 jobs by the end of its fiscal year 2028 as part of a broader effort to implement AI across its operations. HP CEO Enrique Lores said the cuts would affect teams working on product development, customer support and internal operations.

Computer and printer manufacturers employed 58,000 people By October 2024, which means layoffs could represent about 10% of its workforce, according to stock analysis.