Up to 6,000 jobs are to go at HP worldwide in the next three years as the US computer and printer maker increasingly adopts AI to speed up product development.
Announcing a lower-than-expected profit outlook for the coming year, HP said it would cut between 4,000 and 6,000 jobs by the end of October 2028. It has about 56,000 employees. The news drove its shares lower by 6%.
“As we look ahead, we see a significant opportunity to embed AI into HP to accelerate product innovation, improve customer satisfaction and boost productivity,” said the California company’s chief executive, Enrique Lores.
He said teams working on product development, internal operations and customer support would be affected by the job cuts. He added that this would lead to $1bn (£749m) annualized savings by 2028, although the cuts will cost an estimated $650m.
News of the job cuts came as a leading educational research charity warned that up to 3m low-skilled jobs could disappear in the UK by 2035 because of automation and AI. The jobs most at risk are those in occupations such as trades, machine operations and administrative roles, the National Foundation for Educational Research said.
HP had already cut between 1,000 and 2,000 staff in February as part of a restructuring plan.
It is the latest in a run of companies to cite AI when announcing cuts to workforce numbers. Last week the law firm Clifford Chance revealed it was reducing business services staff at its London base by 10% – about 50 roles – attributing the change partly to the adoption of the new technology.
The head of PwC also publicly walked back plans to hire 100,000 people between 2021 and 2026, saying “the world is different” and AI had changed its hiring needs.
Klarna said last week that AI-related savings had helped the buy now, pay later company almost halve its workforce over the past three years through natural attrition, with departing staff replaced by technology rather than by new staff members, hinting at further role reductions to come.
Several US technology companies have announced job reductions in recent months as consumer spending cooled amid higher prices and a government shutdown.
Executives across industries are hoping to use AI to speed up software development and automate customer service. Cloud providers are buying large supplies of memory to meet computing demand from companies that build advanced AI models, such as Anthropic and OpenAI, leading to a rise in memory costs.
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Analysts at Morgan Stanley have warned that soaring prices for memory chips, driven by rising demand from datacentres, could push up costs and dent profits at HP and rivals such as Dell and Acer.
“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,” Lores said.
HP announced better-than-expected revenues of $14.6bn for its fourth quarter. Demand for AI-enabled PCs continues to climb, and they made up more than 30% of HP’s shipments in the fourth quarter to 31 October.
