HP to Lay Off Thousands, Invest in AI to Save Millions

In a major strategic shift, HP Inc. has announced plans to reduce its global workforce by 4,000 to 6,000 employees over the next several years. This workforce restructuring is part of a broader initiative to integrate artificial intelligence across its operations, with the company projecting annualized savings of approximately $1 billion by the end of fiscal year 2028. The layoffs, expected to be finalized by that same fiscal year-end, will predominantly affect departments involved in product development, internal operations, and customer support functions.

During a recent earnings discussion, HP’s Chief Executive Officer Enrique Lores outlined the rationale behind this difficult decision. He emphasized that leveraging AI technologies will allow the company to speed up the creation of new products, enhance the overall customer experience, and significantly increase operational productivity. Lores framed these changes as essential for maintaining competitiveness and driving future growth in a rapidly changing technological environment.

The company’s official fiscal 2025 earnings documentation elaborated on these structural cost-saving measures. It described a comprehensive approach focused on achieving greater operational efficiency through digital transformation and portfolio optimization. Key strategies include simplifying technological platforms, consolidating various internal programs, and implementing wide-ranging productivity enhancements. HP’s leadership believes these structural changes will deliver sustainable financial benefits well into the future.

This announcement from HP reflects a growing trend across the technology sector, where artificial intelligence is increasingly cited as both a driver of innovation and a catalyst for workforce reductions. Employees in many industries are now grappling with uncertainty about how AI advancements might affect their job security and career prospects. Customer service roles appear particularly vulnerable to this technological disruption, according to industry analysts.

The technology industry has witnessed several prominent examples of this shift. Salesforce disclosed in October that it eliminated 4,000 customer support positions, with CEO Marc Benioff openly stating that AI capabilities reduced the need for human staff in certain roles. Similarly, Amazon faced scrutiny from U.S. senators who accused the company of dismissing tens of thousands of employees while citing generative AI adoption, then seeking to fill thousands of positions with foreign workers through the H-1B visa program.

Other major technology firms have followed similar paths. Amazon recently confirmed plans to cut around 14,000 jobs to concentrate resources on high-potential projects, including generative AI development. Intuit revealed last year its intention to eliminate 1,800 roles while simultaneously hiring more AI-specialized personnel. Companies like Klarna and Duolingo have also implemented significant workforce reductions, publicly attributing these changes to their increased reliance on artificial intelligence systems. Most recently, Meta disclosed its strategy to trim 5 percent of its workforce as part of an operational streamlining effort while expanding its artificial intelligence business units.

(Source: Ars Technica)