Up to 6,000 jobs will be lost at HP worldwide over the next three years as the US computer and printer maker increasingly adopts AI to speed product development.
Announcing a lower-than-expected profit outlook for the coming year, HP said it would cut 4,000 to 6,000 jobs by the end of October 2028. It has approximately 56,000 employees. Its shares fell by 6% due to this news.
“As we look ahead, we see a significant opportunity to embed AI at HP to accelerate product innovation, improve customer satisfaction and boost productivity,” said Enrique Lores, chief executive of the California company.
He said teams working on product development, internal operations and customer support will be affected by the job cuts. He said this would lead to annual savings of $1bn (£749m) by 2028, although the cuts would cost an estimated $650m.
News of the jobs cuts comes as a leading educational research charity warned that 3 million low-skilled jobs could disappear in the UK by 2035 due to automation and AI. The National Foundation for Educational Research said the jobs most at risk are in occupations such as trading, machine operation and administrative roles.
HP had already cut 1,000 to 2,000 employees in February as part of a restructuring plan.
It’s the latest in a series of companies citing AI when announcing cuts to workforce numbers. Last week law firm Clifford Chance revealed it was reducing business services staff at its London base by 10% – around 50 roles – with the change being partly attributed to the adoption of new technology.
The head of PwC also publicly rejected plans to hire 100,000 people between 2021 and 2026, saying “the world is different” and AI has changed its hiring needs.
Klarna said last week that AI-related savings had helped ‘buy now, pay later’ The company has almost halved its headcount over the past three years due to natural attrition, with departing employees being replaced by technology rather than new staff members, hinting at further cuts in roles to come.
Many US technology companies have announced job cuts in recent months as consumer spending has slowed amid higher prices and the government shutdown.
Executives across various industries are hoping to use AI to accelerate software development and automate customer service. Cloud providers are purchasing large supplies of memory to meet computing demand from companies that create advanced AI models, such as Anthropic and OpenAI, which is driving up memory costs.
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Morgan Stanley analysts warn that rising prices for memory chips, driven by surging datacenter demand, could drive up costs and eat into the profits of HP and rivals such as Dell and Acer.
“Memory costs currently account for 15% to 18% of the cost of a typical PC, and while growth was expected, its rate has accelerated over the past few weeks,” Lores said.
HP announced better-than-expected revenue of $14.6 billion for its fourth quarter. Demand for AI-enabled PCs continues to grow, and they contributed more than 30% of HP’s shipments in the fourth quarter through October 31.
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