HP Inc plans to reduce its workforce by up to 6,000 employees, an initiative aimed at enhancing operational efficiency through AI utilization. This move was revealed in conjunction with the company’s Q4 results by President and CEO Enrique Lores. The outlined strategy is an extension of HP’s ‘future-ready’ cost-saving roadmap initiated in 2022, which exceeded its $1.4 billion savings objective.

Lores described the initiative as a company-wide program, overseen directly by an executive reporting to him, intended to drive approximately $1 billion in gross savings over three years across various domains, including product development and customer service. The emphasis is on leveraging artificial intelligence to boost customer satisfaction, drive innovation, and streamline operations.

HP’s fourth quarter showcased strong PC sales, raising personal systems revenue to $10.8 billion, marking an eight percent year-over-year increase. However, printing revenue fell by four percent to $4.3 billion. The overall annual revenue reached $55.3 billion, a 4.2 percent rise year-over-year, albeit with dips in net earnings and per-share earnings.

The company has raised concerns regarding the surge in memory prices, now constituting 15 to 18 percent of a typical PC’s cost, posing challenges for the upcoming financial year. Although HP can accommodate cost hikes in the initial half-year, Lores warned of possible margin impacts later. The company aims to tackle rising costs through alternative suppliers and by redesigning product lines to support reduced memory configurations. Price adjustments are on the table, but HP’s strong supplier relationships offer some leverage to secure sufficient memory supply to meet market demands.