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Photo by Alexandre Debiève on Unsplash

HP Inc. announced this week that it will eliminate between 4,000 and 6,000 positions by fiscal year 2028, representing approximately 7-10% of its global workforce. The official justification centres on artificial intelligence adoption. According to CNN’s reporting, the cuts will affect product development, internal operations, and customer support teams—precisely the functions where AI automation promises the greatest efficiency gains.

CEO Enrique Lores framed the restructuring as a strategic necessity during the earnings call. “We expect this initiative will create $1 billion in gross run rate savings over three years,” he stated. The company anticipates $650 million in restructuring costs, with $250 million hitting fiscal 2026.

One ought to be sceptical of corporate narratives that attribute layoffs entirely to technological progress. HP’s financial position tells a more nuanced story. According to CFO Dive, the company posted $55.3 billion in total revenues for fiscal 2025, up 3.2% year-over-year. However, GAAP earnings per share declined 5.7% to $2.65. Revenue grew modestly whilst profitability compressed—the classic setup for cost-cutting regardless of technological justification.

This is not to suggest AI plays no role. HP explicitly cited AI-enabled PCs as a growth driver, noting they represented over 30% of shipments in Q4. The company is investing in AI capabilities even as it reduces headcount in traditional functions. The restructuring reflects a genuine strategic pivot, not merely a euphemism for margin management.

What distinguishes HP’s announcement is its candour. Many companies have reduced workforce whilst vaguely gesturing toward “efficiency” or “market conditions.” HP stated directly that AI adoption drives these cuts. According to Fox Business, this follows an earlier round of 1,000-2,000 layoffs in February 2025 under a previous restructuring plan.

The affected functions deserve attention. Product development suggests AI-assisted design and testing tools reducing engineering headcount. Internal operations implies process automation across HR, finance, and administrative functions. Customer support points toward chatbots and AI agents handling queries previously requiring human representatives. Each category represents a different AI application with different maturity levels.

The three-year timeline is notable. HP is not claiming AI can replace these workers immediately—they are projecting capability development through 2028. This suggests the announcement is partially aspirational: HP believes AI will achieve sufficient capability to justify these reductions, but has not yet deployed systems capable of doing so.

For workers in similar roles at other companies, HP’s announcement functions as a leading indicator. If AI can automate product development, operations, and support functions at HP, it can do so elsewhere. The specific timeline may vary, but the directional trend appears established.

The broader question HP’s restructuring raises is whether AI-driven workforce reduction will prove as transformative as companies claim or whether it will join previous automation waves that changed work rather than eliminating it. History suggests the latter, but history did not have large language models capable of generating code, summarising documents, and conducting conversations at near-human levels.

HP’s shares fell 5.5% in extended trading following the announcement—investors apparently unimpressed by the cost savings narrative. Perhaps they recognise what the efficiency claims obscure: HP is a mature company in a mature market, using AI as justification for the workforce rationalisation it would have pursued regardless.