HP to Cut Up to 6,000 Jobs by 2028 as AI Pivot Reshapes the Tech Workforce

The Numbers Behind the Strategic Shift

HP's fourth-quarter fiscal 2025 results gave the restructuring announcement a solid financial backdrop. Revenue reached $14.64 billion, ahead of analyst expectations of $14.48 billion. Full-year revenue totalled $55.3 billion, representing a 3.2% year-on-year increase. AI-enabled PCs now account for more than 30% of HP's quarterly shipments, with that segment doubling its revenue contribution year-on-year.

Despite that momentum, the company has adopted a deliberately cautious stance on fiscal 2026. Adjusted earnings per share are projected at $2.90 to $3.20, well below the analyst consensus of $3.33. First-quarter adjusted earnings are forecast at between 73 and 81 cents per share. The gap between performance and guidance reflects real uncertainty: rising memory chip costs, driven by data-centre demand from major AI infrastructure investors, are squeezing margins across the PC supply chain.

"It's something we have to do to make sure the company stays competitive," said HP Chief Executive Enrique Lores, pointing to plans to deploy AI across product development, customer support, sales, and manufacturing. CFO Karen Parkhill framed the ambition more expansively: "A significant opportunity ahead to embed AI into almost all that we do to improve productivity, accelerate innovation and improve customer experiences."

Why This Matters for European Investors and Policymakers

HP's restructuring is not a regional story. The company employs significant numbers of workers across the EU and the UK, and its strategic choices reverberate through European supply chains, pension funds, and technology labour markets. For investors on this side of the Atlantic, the conservative earnings guidance is the number that matters most in the short term. For policymakers, the displacement pattern is the headline.

The European Commission's Joint Research Centre has been tracking AI-related labour-market shifts with growing urgency. Its modelling suggests that occupations concentrated in routine cognitive tasks face the highest substitution risk, consistent with the roles HP is cutting: customer support agents, data-entry clerks, administrative staff, and junior quality-assurance testers. The JRC's findings feed directly into the Commission's ongoing work on the AI Act's employment provisions, which require large deployers to assess workforce impact as part of high-risk system obligations.

Separately, Verity Harding, AI policy lead at the Tony Blair Institute for Global Change and one of the most cited voices on AI governance in Westminster, has argued that the challenge for governments is not to slow automation but to ensure that productivity gains are distributed broadly rather than captured entirely by shareholders. HP's $1 billion savings target, set against a share-price drop on the day of the announcement, suggests markets are not yet convinced the strategy will translate cleanly into value.

Industry-Wide Displacement: The European Picture

HP is not an outlier. Across the technology sector, AI has been cited as a contributing factor in more than 31,000 job cuts globally during the first ten months of 2025, forming part of nearly 48,500 total technology-sector workforce reductions. European firms are not immune. SAP, headquartered in Walldorf, Germany, announced earlier this year that it would redeploy thousands of roles as part of an AI-led transformation, targeting functions in finance, human resources, and customer operations.

The roles most exposed to displacement share recognisable characteristics:

• Customer service representatives being substituted by AI-powered chatbots and voice agents
• Data-entry and processing clerks automated by machine-learning workflows
• Content moderation staff supplemented or replaced by AI screening systems
• Junior programmers competing with AI coding assistants for routine development tasks
• Administrative and scheduling roles streamlined through process automation
• Quality-assurance testers displaced by automated testing protocols

The transition simultaneously creates demand for AI engineers, data scientists, and human-AI collaboration specialists. However, the speed at which new roles absorb displaced workers remains an open and contested question in European labour economics.

Supply Chain Pressures and the Manufacturing Shift

Beyond headcount, HP faces a structural cost challenge in its component supply chain. Memory chip price inflation, fuelled by insatiable data-centre demand, is expected to weigh heavily in the second half of fiscal 2026. HP has begun qualifying lower-cost suppliers and reducing memory configurations in certain product lines to defend margins. The company has also relocated manufacturing for nearly all North American products outside China, primarily to reduce tariff exposure.

European procurement teams and channel partners watching these supply-chain moves should note the downstream implications. Component cost pressure at OEM level typically translates into price adjustments or specification trade-offs within six to twelve months. For enterprise buyers refreshing PC fleets ahead of mandated Windows 11 migration cycles, the timing is awkward.

Execution Risk Remains the Central Question

HP's strategic logic is coherent on paper. Concentrate investment in AI-enabled hardware and services, reduce cost in legacy operational functions, and use the savings to fund innovation. The OECD's most recent AI in Work, Automation and Labour Markets report, published in late 2024, found that firms implementing AI with parallel investment in workforce reskilling achieved stronger productivity outcomes than those relying on headcount reduction alone. HP's current communications emphasise redeployment and efficiency rather than reskilling investment, which is a meaningful distinction.

The risk is that AI automation introduces its own hidden costs: error correction, model oversight, and the kind of nuanced customer interaction that chatbots still handle poorly. Companies that have moved fastest on AI-driven cost reduction have sometimes discovered that quality degradation creates a second wave of remediation expense. How HP manages that tension will determine whether this restructuring strengthens or undermines its competitive position in the AI-driven enterprise hardware market.

For European investors holding HP exposure through index funds or direct positions, the next two earnings cycles will be telling. The company has staked its near-term credibility on a $1 billion savings target and an AI-PC growth story. Delivering both, while absorbing chip cost inflation and executing a 10% workforce reduction without operational disruption, is a genuinely difficult task. The financial markets' muted initial response suggests scepticism is the appropriate default stance.