Technology giant HP has revealed plans to eliminate up to 6,000 positions worldwide over the next three years as the company accelerates its adoption of artificial intelligence across operations.
Major Workforce Reduction Announced
The California-based computer and printer manufacturer confirmed it will cut between 4,000 and 6,000 jobs by October 2028, representing nearly 11% of its current workforce of approximately 56,000 employees. The announcement came alongside a lower-than-expected profit outlook for the coming year, sending company shares down by 6%.
Chief Executive Enrique Lores stated that the restructuring represents "a significant opportunity to embed AI into HP to accelerate product innovation, improve customer satisfaction and boost productivity." He indicated that teams working on product development, internal operations and customer support would be most affected by the changes.
Financial Implications and Savings
The job cuts are projected to generate annualised savings of $1 billion by 2028, though the company will face restructuring costs estimated at $650 million. This follows earlier workforce reductions of between 1,000 and 2,000 staff in February as part of an ongoing restructuring plan.
Despite the challenging outlook, HP reported better-than-expected revenues of $14.6 billion for its fourth quarter. The company noted that demand for AI-enabled PCs continues to climb, with these advanced devices comprising more than 30% of HP's shipments in the quarter ending 31 October.
Broader Industry Trend Towards AI
HP joins several major companies citing AI implementation when announcing workforce reductions. Last week, law firm Clifford Chance revealed it was cutting business services staff at its London office by 10%, attributing the change partly to new technology adoption.
Similarly, the head of PwC publicly revised hiring plans for 100,000 people between 2021 and 2026, acknowledging that "the world is different" and AI has altered recruitment needs. Swedish fintech company Klarna reported that AI-related savings helped the business nearly halve its workforce over three years through natural attrition.
The news coincides with warnings from the National Foundation for Educational Research that up to 3 million low-skilled jobs could disappear in the UK by 2035 due to automation and AI. The research charity identified trades, machine operations and administrative roles as most vulnerable.
Market Challenges and Memory Costs
Analysts at Morgan Stanley have raised concerns about rising memory chip prices driven by increasing demand from data centres. These cost increases could potentially impact profits at HP and competitors including Dell and Acer.
Lores commented that "memory costs are currently 15% to 18% of the cost of a typical PC, and while an increase was expected, its rate has accelerated in the last few weeks." Cloud providers are purchasing large memory supplies to meet computing demand from companies developing advanced AI models like Anthropic and OpenAI.
Several US technology companies have announced job reductions in recent months as consumer spending cooled amid higher prices and economic uncertainty. Industry executives across multiple sectors are increasingly looking to AI to accelerate software development and automate customer service functions.
