HP to lay off thousands of workers and save billions with AI

Computer and printer maker HP on Tuesday announced a major restructuring plan that will cut about 10 per cent of its workforce worldwide as the company turns to artificial intelligence (AI) to improve efficiency. So, what should you know about it?

 

4000 to 6000 jobs could be removed worldwide

According to its latest earnings report, the tech giant expects to cut between 4000 and 6000 jobs worldwide to focus on applying AI to increase innovation and customer satisfaction. HP’s move reflects a broader trend in the technology sector, where companies are investing heavily in AI development while using the technology to reduce operating costs.

Moreover, major tech firms, including Google, Microsoft and Amazon, have also announced workforce reductions in the past two years, with many citing the need to reallocate resources, including jobs, toward AI initiatives.

Besides that, industry analysts say AI automation is significantly impacting roles in customer support, content moderation, data entry and some computer programming tasks. HP said the company’s AI plan targets savings of around USD1 billion (~RM4.13 billion) per year by the end of fiscal year 2028.

 

A new business model to cover the high cost of AI computing

Furthermore, the company has been trying to change its business model amid changing demand patterns in the PC and printer markets. HP CEO Enrique Lores told the Wall Street Journal that the company plans to raise the prices of its computers and work with new suppliers to cover the high costs of AI computing.

In the most recent quarter, HP recorded a profit of USD795 million (~RM 3.283 billion), compared to USD906 million (~RM4.09 billion) a year earlier. Revenue rose 4.2 per cent to USD14.64 billion (~RM 64.832 billion), beating analysts’ expectations as PC sales offset a decline in printer sales.

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