Computer maker HP to cut up to 6,000 jobs by 2028 as it turns to AI
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.“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) savings a year by 2028, although the cuts would 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.In the US, about 40% of jobs could be replaced by AI, in sectors ranging from education and healthcare to business and legal, according to a report by the McKinsey Global Institute released this week.AI agents and robots could automate more than half of US work hours using technology that is available today, the US consultancy’s analysis found.
It estimated that $2.9tn of economic value could be unlocked in the US by 2030.Most roles at risk are in legal and administrative services, with tasks such as data entry, financial processing and drafting documents likely to be handled by AI systems, although people will still be needed to design, supervise and verify.Dangerous, physical jobs such as machine operation could be replaced by robots.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 cut back on 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 an increase in memory costs,Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionThe push by big tech companies to build out AI infrastructure has triggered price increases for dynamic random access memory and NAND semiconductors – two commonly used types of memory chips – amid high competition in the server market,Analysts at Morgan Stanley have said 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 posted better-than-expected revenues of $14.6bn for its fourth quarter.Demand for AI-enabled PCs continues to increase, and they made up more than 30% of HP’s shipments in the fourth quarter to 31 October.However, it forecast between $2.90 and $3.
20 in adjusted net earnings per share for the coming year, below analysts’ forecasts of $3.33.It said the outlook reflected added costs from US trade tariffs.HP shares fell as much as 6% after announcing the job cuts.
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