HP shared on Tuesday that it expects to increase artificial intelligence within the company and lay off about 4,000-6,000 employees by the end of 2028. With approximately 56,000 employees, this is equivalent to a 10% workforce reduction.
“Looking ahead, we are taking decisive action to mitigate recent cost constraints and invest in AI-enabled initiatives to accelerate product innovation, improve customer satisfaction, and increase productivity,” HP CFO Karen Parkhill said in the press release. According to the Guardian, the cuts will center around product development, internal operations and customer support teams.
It is safe to say that the question that has dominated so far is whether or not AI is going to cause mass unemployment by 2025.
The job market is serious. Companies are cutting back on hiring new employees, while some are laying off hundreds of people to please investors in the next earnings report.
Fed Chairman Jerome Powell said in September that although there is still great uncertainty, he believes AI is “likely a factor” in the dramatic slowdown in hiring, especially when it comes to young graduates who are facing particularly worrisome unemployment conditions.
There have also been studies to support this phenomenon. A Stanford study in August found that workers aged 22 to 25 in the most AI-exposed jobs were hardest hit by declines in employment. Many believe that the jobs that are easiest to automate will be performed by young graduates. Experts have expressed concern over its impact on society as a whole, as less early career work will mean that the next generation of the workforce will not receive vital training.
Even without the study, companies are openly and even proudly pointing the finger at AI as why they are laying off people or not hiring as much.
Online learning platform Chegg recently laid off 45% of its workforce, citing “the new realities of AI” as a factor. Amazon cut 14,000 white-collar jobs, first pointing the finger at the “transformative technology” of AI and claiming days later that the cuts were not economical nor AI-driven.
Many executives, such as Shopify CEO Tobias Lütke and Duolingo CEO Louis von Ahn, have also been clear about their desire to reduce hiring in favor of automation. PwC’s global chairman told the BBC last week that the company had scrapped a plan made in 2021 to create 100,000 jobs by 2026 because “now we have artificial intelligence.”
However, still, some experts dispute that basis.
“Implementing AI in a company is much more difficult than people realize,” Robert Simmons, a professor of management and organizations at New York University, told Gizmodo in August. “Companies typically don’t have the internal talent that is needed to train, operate, and oversee AI, and so unless you have employees who have that expertise, it will be really hard to rely heavily on AI.”
An MIT report from August may support this: Corporate AI pilots are not as good as they seem at generating real revenue gains.
Siemens believes that at least some of these companies are actually using AI as a scapegoat for layoffs caused by economic uncertainty or things like tariffs, which are “very hard to blame.”
Meanwhile, Palantir CTO Shyam Shankar recently called the “all-powerful-AI-taking-over-jobs” narrative of Silicon Valley “fundraising nonsense” in a recent conversation with The New York Times.
On the other hand, author Cory Doctorow believes that AI is unable to successfully replace many workers, but that bosses, and especially tech bosses, “love the story” as a means of scaring workers into working more and complaining less (because, hypothetically, an AI chatbot could do all that work and not have to take breaks).
“This gives them an opportunity to put them in their place,” Doctorow said in an interview last month.
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