Hewlett-Packard, a foundational name in Silicon Valley’s history, announced plans this week to eliminate between 4,000 and 6,000 jobs over its 2028 fiscal year, marking a reduction of roughly 7% to 10% of its approximately 58,000-person global workforce. The restructuring, revealed alongside quarterly earnings, arrives amid an already severe tech sector downturn affecting the West Coast. For thousands of employees, the announcement transformed an abstract corporate strategy into immediate personal uncertainty.
The company expects to spend approximately $650 million on severance and related restructuring costs, with the goal of achieving around $1 billion in annual savings once fully implemented. CEO Enrique Lores characterized the decision as among “the most difficult” leadership must make, pledging to treat departing employees “with care and respect” even as entire teams face disruption.
The AI Redesign Strategy
HP’s restructuring centers on artificial intelligence as the primary driver of operational change. Over the past two years, the company has conducted pilot programs testing AI applications across various functions. Based on those results, management concluded that many tasks currently performed by employees could be redesigned around AI tools and automation.
The company is targeting back-office workflows, customer support operations, and portions of product development for AI-driven transformation. Routine support inquiries, internal documentation, software testing, and certain coding tasks represent prime candidates for automation or AI assistance. Executives argue this will allow remaining staff to focus on higher-value work, though displaced workers face less optimistic prospects.
A Pattern of Repeated Reductions
This announcement represents HP’s latest in a series of major workforce cuts. In 2022, the company initiated a plan to eliminate 4,000 to 6,000 positions over three years, which was subsequently expanded. Earlier in 2025, HP announced an additional 1,000 to 2,000 layoffs under its “Future Ready Transformation” program. Combined, these initiatives target roughly 11,000 to 14,000 positions across just a few years.
Financial Pressures and Market Challenges
HP’s restructuring reflects mounting financial pressures. For fiscal 2024, the company reported approximately $53.6 billion in revenue, essentially flat compared to the prior year. While the most recent quarter showed modest growth, profit guidance disappointed investors. Rising component costs, weakening PC market dynamics, and persistent decline in printing operations have compressed margins, intensifying management’s focus on cost reduction.
The printing division, once a reliable profit source, continues to shrink as offices print less and consumers embrace digital workflows. Recent quarters have shown mid-single-digit percentage declines in printing revenue. On the PC side, HP faces rising memory and component prices precisely as the pandemic-era upgrade cycle fades, further squeezing profitability.
Broader Regional Impact
HP’s announcement reflects a larger crisis unfolding across California’s technology sector. The state has led the nation in tech-related layoffs over the past two years, with tens of thousands of high-paying positions disappearing from the Bay Area and surrounding regions. Intel has slashed thousands of jobs across West Coast operations, including significant reductions at Oregon facilities. Amazon announced approximately 14,000 white-collar cuts, with substantial numbers affecting California offices. Salesforce eliminated roughly 4,000 customer support roles, reducing that division from around 9,000 to 5,000 employees. Microsoft and Meta Platforms have likewise announced multiple waves of cuts targeting thousands of employees.
Across the broader economy, companies have attributed nearly 50,000 U.S. job cuts to AI so far this year, with particularly sharp increases in October. For affected workers and their communities, the pattern suggests not isolated restructuring but a structural shift in how white-collar labor is valued and deployed.
Long-Term Implications
HP’s restructuring will unfold gradually through fiscal 2028, meaning years of intermittent cuts and reorganizations ahead. The company expects to recognize most restructuring charges over the next couple of fiscal years, with meaningful savings only materializing later. Maintaining employee morale and productivity while uncertainty persists may prove as challenging as the technical transformation itself.
For California, HP’s move carries symbolic weight. A company deeply rooted in the state’s technology narrative for decades is now openly stating it requires far fewer people to operate in an AI-first era. As more established technology firms follow similar paths, the central question shifts from whether artificial intelligence will transform white-collar work to how rapidly it will occur and who bears the immediate cost.
Sources:
HP Inc. fiscal 2024 earnings report and November 2025 restructuring announcement
Reuters and CNN reporting on HP layoff plans (November 25-26, 2025)
Challenger, Gray & Christmas employment reports on AI-linked job cuts (2025)
Los Angeles Times California employment crisis analysis (November 2025)
Intel, Amazon, Salesforce, Microsoft, and Meta public layoff announcements and earnings disclosures (2024-2025)
UC Berkeley labor economics commentary on tech sector workforce disruption.