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

HP Inc. has announced plans to reduce its workforce by 4,000 to 6,000 employees, a move aimed at integrating more artificial intelligence into its operations. The company projects that these layoffs will contribute to annual savings of $1 billion by the conclusion of its fiscal year 2028. The layoffs, expected to be finalized by the end of the fiscal year, will primarily affect areas such as product development, internal operations, and customer support. During a recent earnings call, CEO Enrique Lores emphasized that leveraging AI would enhance product innovation, elevate customer satisfaction, and increase overall productivity. In its fiscal 2025 earnings report, HP highlighted that the planned structural cost savings are a result of improved operational efficiency, digital transformation, and optimizing its portfolio. These changes, which include workforce reductions and program consolidations, are designed to establish sustainable practices for the long term. The announcement comes amid widespread uncertainty among workers regarding the implications of AI on job security. Certain sectors, particularly customer support, are anticipated to face more significant disruptions. This trend in the tech industry has already seen major layoffs linked to AI advancements. For instance, Salesforce recently cut 4,000 customer support positions, with CEO Marc Benioff stating that AI's integration meant a need for fewer employees. In September, U.S. senators criticized Amazon for attributing its layoffs of thousands of employees to the adoption of generative AI tools, subsequently replacing them with foreign workers. Similarly, Amazon has revealed plans to lay off around 14,000 employees to prioritize its most promising ventures, including generative AI. Other companies like Intuit and Meta have also announced job cuts in favor of AI-focused roles, reflecting a growing trend in the tech landscape.