HP to Lay Off 6,000, and Generate £800M Savings With AI Gamble

HP has revealed plans to cut thousands of jobs as the company pushes further into artificial intelligence and attempts to simplify its operations. The giant tech firm confirmed that between 4,000 and 6,000 positions will be removed globally by the end of its 2028 fiscal year. The initiative forms part of a much larger cost saving programme that is expected to deliver about one billion dollars in gross run rate savings within three years, which is roughly equal to £800 million (approximately $1billion).

Why HP is Cutting Jobs for AI

In its latest earnings update, HP described the job cuts as a response to massively changing market conditions, rising operational costs and the gains it expects from greater use of artificial intelligence.

Moreover, the company explained that it plans to streamline teams, consolidate platforms and increase the deployment of AI across product development, customer support and internal processes. And executives said the intention is to achieve a simpler organisational structure that allows more investment in AI-driven products and services.

Furthermore, reports that reviewed the plan have noted that the restructuring is likely to include huge upfront charges. Reports suggest these charges could reach around $650 million (£494 million approx) during the transition period. HP has not provided a regional breakdown of which markets will see the largest reductions and said the process will run through to fiscal 2028.

While HP has not listed specific teams that will be cut, industry reports suggest that roles involving repetitive work or heavy administrative tasks could be the most exposed. Functions within customer support, certain areas of product development and parts of operations may face higher levels of automation as AI systems replace manual tasks.

READ MORE: Apple Layoffs: Real Reason Behind iPhone Maker Cutting Jobs

Why AI is HP's Main Strategy

HP's approach is very similar to a growing trend across the technology sector. Many major firms are investing heavily in generative AI with the expectation that it can redesign workflows, reduce human involvement in basic tasks and support new product lines. HP believes that adopting AI at scale will support the expected £800 million in savings while also giving the company a stronger position in the next wave of computing.

Moreover, for employees the strategy introduces a period of uncertainty. Thousands of workers will spend the coming years waiting to learn whether their roles will be affected. Some reports say that rapid adoption of AI could lead to uneven productivity gains, with shareholders often benefiting long before staff see any improvement in workplace conditions.

Presumably, for customers the changes could produce mixed outcomes. HP seemingly aims that greater use of AI should eventually lead to more advanced PCs and smarter support systems. But this might mean that at the same time, service quality may fluctuate during the transition as departments adjust and new tools replace older processes.

There is also a bigger policy debate surrounding the announcement. Governments are increasingly engaged in discussions about how to support workers displaced by automation and how companies should manage large scale reorganisations. HP has not provided detailed information about what assistance it will offer to departing employees. It is possible that the company could introduce severance packages or outplacement support as part of the restructuring, but this has not been confirmed in the reporting so far and remains speculative. The scale of the restructuring charges suggests that some funds may be allocated to staff related costs, although the exact form these measures will take is still unclear.