HP Announces Significant Job Cuts Amid AI Integration
HP Inc. is poised to eliminate as many as 6,000 positions globally over the next three years, as the venerable American computer and printer manufacturer increasingly leverages artificial intelligence to enhance product development processes.
In its latest financial forecast, HP revealed a profit outlook that fell short of analysts’ expectations. The company disclosed plans to reduce its workforce by 4,000 to 6,000 jobs by the close of October 2028, a move affecting a workforce currently estimated at 56,000 employees. Consequently, HP’s stock price experienced a sharp decline, falling approximately 6%.
Enrique Lores, the chief executive of HP, articulated the company’s vision during the announcement: “As we look toward the future, we recognize a substantial opportunity to integrate AI into our operations, thereby accelerating product innovation, enhancing customer satisfaction, and elevating productivity levels.”
The impending layoffs will predominantly impact teams involved in product development, internal operations, and customer support.
Lores indicated that this strategic redirection would yield annual savings of $1 billion (£749 million) by the year 2028, despite the estimated cost of the layoffs reaching around $650 million.
Simultaneously, a prominent educational research charity cautioned that automation and AI could threaten as many as 3 million low-skilled jobs in the UK by 2035.
According to the National Foundation for Educational Research, the sectors most vulnerable include trades, machinery operation, and administrative roles.
Notably, HP had previously laid off between 1,000 and 2,000 employees in February as part of an ongoing restructuring initiative.
HP is not alone in this trend; numerous corporations are invoking AI in their workforce reduction announcements. Recently, the law firm Clifford Chance disclosed a 10% reduction in business services staff at its London office—approximately 50 positions—citing AI adoption as a contributing factor.
Additionally, the head of PwC announced significant cuts to hiring plans, scaling back from an initial intention to employ 100,000 individuals between 2021 and 2026, stating, “The world is different now,” emphasizing the transformative influence of AI on hiring strategies.
Klarna, a buy now, pay later service, recently reported that efficiencies derived from AI have allowed it to nearly halve its workforce over the past three years, primarily through natural attrition, as departing employees were increasingly substituted by technological solutions rather than new hires.
In recent months, several tech giants across the United States have executed layoffs as consumer spending has tempered amidst rising prices and political uncertainties fueled by a government shutdown.
Executives across various industries are eager to harness AI to expedite software development and automate customer service functions.
loud service providers are aggressively acquiring substantial quantities of memory to support the computing demands of companies engineering advanced AI models, such as Anthropic and OpenAI, leading to heightened memory costs.
Collaborators at Morgan Stanley have indicated that surging prices for memory chips, driven by escalating demand from data centers, could exacerbate costs and negatively impact profit margins at HP and its competitors, including Dell and Acer.
On a more favorable note, HP disclosed a quarterly revenue of $14.6 billion for its fourth quarter, surpassing expectations. The demand for AI-enabled PCs continues to surge, constituting over 30% of HP’s shipments in the fourth quarter ending October 31.
Source link: Theguardian.com.
