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

PK plans to make cuts between 4,000 and 6,000 jobs by the end of fiscal year 2028, as part of a broader push to implement AI in its operations. HP CEO Enrique Lores said the cuts will impact teams working on product development, customer support and internal operations.

The computer and printer maker employed 58,000 people According to Stock Analysis, this means layoffs could represent around 10% of the workforce starting in October 2024.

HP estimates it will save about $1 billion by 2028 if the job cuts are implemented. The company says it will incur $650 million in restructuring costs, about $250 million of which will occur in fiscal 2026.

HP shares fell almost 6% in extended trading on Tuesday following the news. The stock was decrease of more than 2.5% on Wednesday.

Related: Apple made rare layoffs targeting one specific team

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

“As we accelerate innovation in AI-powered devices to increase productivity, security and flexibility for our customers, our focus for FY26 is on disciplined execution,” Lores said in a statement statement. “We strive to deliver measurable results and ensure our plans translate into long-term value for our shareholders.”

The layoff announcement came at the same time as HP’s financial results for fiscal year 2025. Annual revenue increased 3.2% year over year to $55.3 billion. Fourth quarter net sales were $14.6 billion, up 4.2% and marking the sixth consecutive quarter of sales growth for HP.

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

This is evident from an earnings presentation viewed by Fox BusinessHP’s strategy is to drive the adoption and enablement of artificial intelligence while lowering costs, in part by reducing its workforce.

Related: AI and cost cutting lead to worst October layoffs in 22 years

Reuters reported that Lores said during a media briefing this week that HP began rolling out AI pilots two years ago to boost productivity and customer service.

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

Agentic AI is AI that can act with little to no human intervention to make decisions, execute plans, and take action. Companies are already using it to get their work done faster. Services company Capita announced earlier this year that it has used agent AI on more than 200 recruitment tasks to speed up recruitment.

A McKinsey report issued found on Tuesday that AI can already automate 57% of all work hours in the US, but this represents the automation of tasks, not the elimination of jobs. AI can take over repetitive tasks, but human skills such as judgment and emotional intelligence will remain crucial to the future of work, according to the researchers.

PK plans to make cuts between 4,000 and 6,000 jobs by the end of fiscal year 2028, as part of a broader push to implement AI in its operations. HP CEO Enrique Lores said the cuts will impact teams working on product development, customer support and internal operations.

The computer and printer maker employed 58,000 people According to Stock Analysis, this means layoffs could represent around 10% of the workforce starting in October 2024.