HP, the US-based computer and printer manufacturer, is ramping up its use of AI to speed up product development, with plans to create between 4,000 and 6,000 jobs worldwide over the next three years.
The company announced that its profit forecast for the upcoming year is less optimistic than anticipated. HP indicated it would cut jobs while expecting to bolster its workforce by the end of October 2028. Currently, HP has around 56,000 employees. The announcement caused a 6% dip in the company’s stock price.
“Looking ahead, we recognize a substantial opportunity to integrate AI into HP to facilitate product innovation, enhance customer satisfaction, and boost productivity,” stated Enrique Lores, CEO of the Californian company.
He mentioned that the layoffs would impact teams involved in product development, internal operations, and customer support, forecasting annual savings of $1 billion (£749 million) by 2028, despite incurring an estimated cost of $650 million from the cuts.
These job cut announcements coincide with warnings from a prominent education and research charity that up to three million low-skilled jobs in the UK could vanish by 2035 due to automation and AI. The National Educational Research Foundation suggests that jobs at risk include those in trades, machine operation, and management.
Earlier this year, in February, HP had already reduced its workforce by 1,000 to 2,000 employees as part of a restructuring initiative.
Recently, various companies have cited AI advancements as a reason for workforce reductions. Last week, law firm Clifford Chance announced a 10% reduction in its London business services staff (approximately 50 positions), partly due to new technological implementations.
The head of PwC recently scaled back plans to hire 100,000 employees from 2021 to 2026, remarking that AI has altered hiring requirements, stating, “The world is different than it was.”
Khurana noted last week that the Buy Now, Pay Later company has nearly halved its workforce over three years through attrition, attributing this to savings related to AI, with departing staff being replaced by technology rather than new hires, indicating potential further cuts ahead.
Numerous US technology firms have initiated job cuts in recent months as rising prices and a government shutdown negatively affect consumer spending.
Business leaders in various sectors aim to leverage AI to expedite software development and automate customer service. Cloud providers are securing substantial memory resources to meet the computing needs of companies like Anthropic and OpenAI that are developing advanced AI models, which has led to rising memory costs.
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Analysts at Morgan Stanley have indicated that rising memory chip prices driven by increased demand from data centers could put pressure on profits for HP as well as competitors like Dell and Acer.
“Memory costs are currently 15-18% of a typical PC’s price, and while we anticipated an increase, the rate has surged in recent weeks,” stated Lores.
HP reported fourth-quarter sales of $14.6 billion, surpassing expectations. There is a growing demand for AI-powered PCs, accounting for over 30% of HP’s shipments in the quarter ending October 31.
Source: www.theguardian.com
