HP Announces Major Workforce Reduction as Company Pivots to AI-Driven Operations

HP plans to save millions by laying off thousands, ramping up AI use

HP Inc. said that it will lay off 4,000 to 6,000 employees in favor of AI deployments, claiming it will help save $1 billion in annualized gross run rate by the end of its fiscal 2028. HP expects to complete the layoffs by the end of that fiscal year. The reductions will largely hit product development, internal operations, and customer support, HP CEO Enrique Lores said during an earnings call on Tuesday. Using AI, HP will "accelerate product innovation, improve customer satisfaction, and boost productivity," Lores said. In its fiscal 2025 earnings report released yesterday, HP said: Structural cost savings represent gross reductions in costs driven by operational efficiency, digital transformation, and portfolio optimization. These initiatives include but are not limited to workforce reductions, platform simplification, programs consolidation and productivity measures undertaken by HP, which HP expects to be sustainable in the longer-term. AI blamed for tech layoffs HP's announcement comes as workers everywhere try to decipher how AI will impact their future job statuses and job opportunities. Some industries, such as customer support, are expected to be more disrupted than others. But we've already seen many tech layoffs tied to AI. Salesforce, for example, announced in October that it had let go of 4,000 customer support employees, with CEO Marc Benioff saying that AI meant "I need less heads." In September, US senators accused Amazon of blaming its dismissal of "tens of thousands" of employees on the "adoption of generative AI tools" and then replacing the workers with over 10,000 foreign H-1B employees. Last month, Amazon announced it would lay off about 14,000 people to focus on its most promising projects, including generative AI. Last year, Intuit said it would lay off 1,800 people and replace them with AI-focused workers. Klarna and Duolingo have also replaced significant numbers of workers with AI. And in January, Meta announced plans to lay off 5 percent of its workforce as it looks to streamline operations and build its AI business. That's just a handful of layoffs by tech companies that have been outrightly or presumably connected to AI investments. According to analysis from outplacement services and executive coaching firm Challenger, Gray & Christmas, as of October, technology firms had announced 141,159 job cuts since the year's start, a 17 percent increase from the same period last year (120,470). But some experts question whether or not AI is really driving corporate layoffs or if companies are using the buzzy technology as a scapegoat. Peter Cappelli, a management professor and director of the Center for Human Resources at The Wharton School of the University of Pennsylvania, told CNBC this month that "there's very little evidence that [AI] cuts jobs anywhere near like the level that we're talking about." He noted that effectively using AI to replace human workers is "enormously complicated and time-consuming." In September, Gartner analysts predicted that all IT work will involve AI by 2030, compared to 81 percent today. However, humans will remain essential, per VP analysts Alicia Mullery and Daryl Plummer, who said that 75 percent of IT workloads will still involve people. More broadly, there's hope that AI will actually lead to more jobs, not fewer. In January, the World Economic Forum released its Future of Jobs Report 2025, which predicted that AI would create 78 million more jobs than it eliminates by 2030. The report was based on data from 1,000 companies with 14 million employees worldwide. It will be years before we comprehend AI's impact on the workforce. In the meantime, we can expect AI to be at the center of more layoff announcements -- whether people believe the job cuts are solely the results of AI or not.

HP to sack up to six thousand staff under AI adoption plan

Warns memory price explosion means PCs may have less RAM, or use low-cost parts HP Inc will sack between 4,000 and 6,000 workers under a plan that calls for the PCs-and-printers prodigy to use AI to improve its operations. President and CEO Enrique Lores announced the plan on Tuesday alongside the company's Q4 results, during which he said HP Inc's "future-ready" cost savings plan, which commenced in 2022 and recently concluded, beat its savings target of $1.4 billion. But HP Inc still has fat to trim, so has launched what Lores described as "a company-wide program led by an executive reporting directly to me." "We have a line of sight to drive approximately $1 billion of gross run rate savings over three years across product development, customer service and support, and many of our operational processes," he said. The company's results announcement [PDF] states the aims of the new cost-cutting program are "to drive customer satisfaction, product innovation, and productivity through artificial intelligence adoption and enablement." Or in other words, replacing about ten percent of the company's people with AI, to save $1 billion. Lores hinted at how HP might find those savings by pointing to its own adoption of AI PCs running "curated applications" that he said see internal teams "deliver better results with their productivity up 16 percent." Strong sales of all PCs saw HP's personal systems revenue reach $10.8 billion in Q4, eight percent year-over-year growth. Printing revenue dipped four percent to $4.3 billion. Full-year revenue across the company hit $55.3 billion, up 4.2 percent year-over-year, but net earnings and earnings per share dipped. HP is worried that rising memory prices will make its next financial year challenging. "Memory costs are currently 15 to 18 percent of the cost of a typical PC," Lores said. "While an increase was expected, its rate has accelerated in the last few weeks." HP thinks it can withstand increased memory costs in the first half of its financial year, but warned margins for personal system will likely be impacted in H2. The company will try to address that with measures including "qualifying lower-cost suppliers and redesigning the portfolio for reduced memory configurations." Price rises are also on the agenda, but HP thinks it has an edge because its long-term relationships with suppliers mean it is confident it will have enough memory to meet demand. ®

HP to lay off up to 6,000 workers as it goes all-in on AI and automation

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. What just happened? HP Inc has become the latest big tech firm to announce it is laying off thousands of jobs while investing heavily in AI. The printer and PC maker said it will be cutting staff by between 4,000 and 6,000 people by the end of fiscal 2028 as it focuses on automation tools such as agentic AI. HP revealed the cuts in its latest earnings report. It estimates that the move will save the company $1 billion across three years. The restructuring is expected to incur around $650 million in costs, around $250 million of which will fall in fiscal 2026. As with the many other companies laying off staff, HP says it aims to drive customer satisfaction, product innovation, and productivity through artificial intelligence adoption. "Two years ago, we started to do some pilots on how AI could help us to drive these things," HP CEO Enrique Lores said during an earnings call. "What we have learned is that we need to start from redesigning the process, and once we know how the process could be redone using AI, using agentic AI, it can really have a very significant impact." Lores added that HP intended to grow faster than the market in 2026, and that it had a "significant opportunity" to embed AI in everything it does, thereby transforming the company. There's a long list of companies that have laid off workers as a direct result of AI this year. Amazon (despite what Andy Jassy claims), Glassdoor, Indeed, Microsoft, Meta, Cisco, TikTok, IBM, and many more have let go of thousands as they opt for automation over humans. We've seen claims that blaming AI can be a convenient excuse for companies looking to reduce staff while also appearing cutting edge. Earlier this month, data from workplace analytics firm Visier showed that companies are rehiring a growing share of the same employees they laid off as AI fails to live up to its promise as a cheap(er) human replacement. Elsewhere, the memory crisis that is sending the price of DRAM through the roof is expected to impact HP, forcing it to raise the price of its devices. But Microsoft ending Windows 10 support in October is expected to push more people into buying its Windows 11 machines. HP's stock fell more than 5% in after-hours trading and is down more than 25% in 2025.

HP Joins List of Tech Companies Cutting Jobs and Pointing to AI

Computer maker HP is joining the growing list of companies that are conveniently announcing company-wide AI initiatives and plans to cut thousands of jobs at the same time. HP shared on Tuesday that it expects to scale artificial intelligence within the company and lay off about 4,000-6,000 employees by the end of 2028. With roughly 56,000 employees, that comes up to a 10% workforce reduction. “Looking forward, we are taking decisive actions to mitigate recent cost headwinds and are investing in AI-enabled initiatives to accelerate product innovation, improve customer satisfaction, and boost productivity," HP CFO Karen Parkhill said in the press release. Per the Guardian, the cuts will be centered around the product development, internal operations, and customer support teams. It's safe to say that 2025 has so far been dominated by the question of whether or not AI is leading to mass unemployment. The job market is grim. Companies are cutting back on hiring new employees, while some are laying off hundreds to make investors happy in the next earnings report. Fed Chair Jerome Powell said in September that although there is still great uncertainty, he believes that AI is "probably a factor" in the dramatic slowdown in hiring, particularly when it comes to young graduates who are facing a particularly concerning unemployment situation. There have been studies to back this phenomenon up as well. A Stanford study from August found that workers aged 22 to 25 in the most AI-exposed jobs were hit hardest by a decline in employment. Many deem the jobs that are easiest to automate are those that would be done by young graduates. Experts have voiced concerns over the impact this will have on society as a whole, as less early career work would mean that the next generation of the workforce won't receive crucial training. Even without the studies, companies have been openly and even proudly pointing the finger at AI as the reason why they are laying people off or just not hiring as much. Online learning platform Chegg laid off 45% of its workforce recently, citing "new realities of AI" as a factor. Amazon slashed 14,000 white-collar jobs, first seemingly pointing the finger at the "transformative technology" of AI before claiming days later that the cuts were not financially nor AI-driven. Many executives, like Shopify CEO Tobias Lütke and Duolingo CEO Luis von Ahn, have also been clear about their wish to reduce hiring in favor of automation. PwC global chairman told BBC last week that the company had scrapped plans it made in 2021 to hire 100,000 people by 2026, because "now we have artificial intelligence." Still, though, some experts dispute that premise. “It’s much harder to implement AI in a firm than people realize,†Robert Seamans, New York University professor of management and organizations, told Gizmodo in August. “Firms don’t typically have the in-house talent that’s needed to train, operate, and oversee whatever AI they implement, and so until you have the personnel in place that have that expertise, it’s going to be really hard to rely heavily on AI.†An MIT report from August can back this up: corporate AI pilots are not as good as they seem at generating actual revenue gains. Seamans believes that at least some of these companies are actually using AI as a scapegoat for layoffs that stem from things like economic uncertainty or tariffs, which are "much harder to blame." Meanwhile, Palantir CTO Shyam Sankar called the "all-powerful-AI-taking-over-jobs" narrative a Silicon Valley "fundraising shtick," in a recent conversation with the New York Times. Author Cory Doctorow, on the other hand, thinks that AI is unable to successfully replace many workers but bosses, and specifically tech bosses, "love the story" as a means to terrify workers into working more and complaining less (since, hypothetically, an AI chatbot could do all that work and not have to take breaks). "It gives them a chance to put them in their place," Doctorow said in a talk last month.

Computer maker HP to cut up to 6,000 jobs by 2028 as it turns more to AI

US firm says plan to speed up product development and improve customer satisfaction would save $1bn a year 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) annualised 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. 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.

HP Says It's Cutting Thousands of Jobs Due to AI -- and Will Save $1 Billion

According to an HP earnings presentation, the company's strategy is to drive "artificial intelligence adoption and enablement" while reducing costs through "workforce reductions." HP plans to cut between 4,000 and 6,000 jobs by the end of its fiscal year 2028 as part of a broader push to implement AI in its operations. HP CEO Enrique Lores said the cuts will affect teams working on product development, customer support and internal operations. The computer and printer maker employed 58,000 people as of October 2024, according to Stock Analysis, which means the layoffs could represent around 10% of its workforce. HP estimates that it will save approximately $1 billion by 2028 as it puts the job cuts into effect. The company says it will shoulder $650 million in restructuring costs, with about $250 million of the expense taking place in fiscal year 2026. Lores said that the cuts are not just about reducing costs, but about "disciplined execution." "As we accelerate innovation across AI-powered devices to drive productivity, security and flexibility for our customers, our focus for FY26 is on disciplined execution," Lores said in a statement. "We are committed to driving measurable results -- ensuring that our plans translate into long-term value for our shareholders." The layoff announcement arrived alongside HP's financial results for the fiscal year 2025. Annual revenue was up 3.2% year-over-year, hitting $55.3 billion. Fourth quarter net revenue was $14.6 billion, up 4.2% and marking HP's sixth consecutive quarter of revenue growth. HP laid off 1,000 to 2,000 workers in February as part of a separate restructuring plan. According to an earnings presentation viewed by Fox Business, HP's strategy is to drive "artificial intelligence adoption and enablement" while reducing costs, partly through "workforce reductions." Related: AI and Cost-Cutting Lead to the Worst October Layoffs in 22 Years Reuters reported that during a media briefing call this week, Lores said HP started rolling out AI pilots two years ago to drive productivity and customer service. "What we have learned is that we need to start from redesigning the process, and once we know how the process could be redone using AI, using agentic AI, it can really have a very significant impact," Lores said on the call. Agentic AI is AI that can act with little to no human intervention to make decisions, carry out plans and take action. Companies are already using it to get work done faster. Services firm Capita announced earlier this year that it has used agentic AI on more than 200 recruitment tasks to accelerate hiring. A McKinsey report released on Tuesday found that AI can already automate 57% of all U.S. work hours, but this represents the automation of tasks, not the elimination of jobs. AI can take over repetitive tasks, but human skills like judgment and emotional intelligence will remain crucial to the future of work, according to the researchers.

HP to cut about 6,000 jobs by 2028, ramps up AI efforts

(Reuters) -HP Inc said on Tuesday it expects to cut between 4,000 and 6,000 jobs globally by fiscal 2028 as part of a plan to streamline operations and adopt artificial intelligence to speed up product development, improve customer satisfaction and boost productivity. HP's teams focused on product development, internal operations and customer support will be impacted by the job cuts, CEO Enrique Lores said during a media briefing call. "We expect this initiative will create $1 billion in gross run rate savings over three years," Lores added. The company laid off an additional 1,000 to 2,000 employees in February, as part of a previously announced restructuring plan. Demand for AI-enabled PCs has continued to ramp externally, reaching over 30% of HP's shipments in the fourth quarter ended October 31. A global memory chip price surge brought on by rising demand from data centers could push up costs and pressure profits at consumer electronics makers such as HP, Dell and Acer, Morgan Stanley analysts have warned. Big Tech's push to build out AI infrastructure has triggered price increases for dynamic random access memory and NAND -- two commonly used types of memory chips -- amid high competition in the server market. Lores said that HP expects to feel the impact in the second half of fiscal 2026, with higher price increases. HP has enough inventory in hand for the first half. "We are taking a prudent approach to our guide for the second half, while at the same time implementing aggressive actions like qualifying lower cost suppliers, reducing memory configurations and taking price actions," Lores said. The company expects fiscal 2026 adjusted profit per share between $2.90 to $3.20, below analysts' average estimate of $3.33, according to data compiled by LSEG. HP expects adjusted first-quarter profit per share between 73 cents and 81 cents, with the midpoint coming below estimates of 79 cents apiece. Revenue for the fourth quarter was $14.64 billion, beating estimates of $14.48 billion. (Reporting by Juby Babu in Mexico City; Editing by Alan Barona)