As HP prepares to axe up to 6,000 jobs in the name of AI, how will this dynamic play out among IT distributors and VARs?
That was a key question on the lips of IT distributors today as they descended on an event dedicated to their growth and development.
HP CEO Enrique Lores last night announced that the PC and printer vendor will reduce its workforce by 4,000 to 6,000 staff between now and 2028 as part of an ‘AI adoption and enablement plan’.
It is targeting $1bn of gross runrate savings across product development, customer service and support, and many of its operational processes.
HP joins a growing line of vendors downsizing in the name of AI.
It employed around 58,000 staff at the end of its last financial year, meaning the cuts would represent between 6.9% and 10.3% of its workforce.
“It’ll just get more efficient”
HP’s AI job cuts were referenced multiple times at a Pimberly event today attended by representatives of distributors and marketplaces including Exertis, Westcoast, Ci Distribution and CMS Distribution, CoreTech and Pax8. Held in Covent Garden, the event saw distributors exchange views on the importance of product data.
Asked how AI-fuelled headcount reductions might play out in the front to middle offices of distributors and resellers, Ci Distribution Non-Executive Director Alex Tatham played down the potential impact.
“Will there be a massive reduction in sales heads? I don’t think so,” he said.
“I just don’t think there’ll be a growth in sales heads. It’ll just get more efficient, and therefore you’ll get better coverage, and generally that’s what I think AI’s going to do.”
In answer to the same question, Dominique Deklerck, Sustainability Project Lead at the GTDC, referenced Ingram Micro’s recent launch of its first AI sales agent.
“I think we’ll see more of those things – AI assisting salespeople, or product management people,” he said.
Deklerck’s fear is that over time some roles could be “completely replaced”, especially in areas like marketing production.
“Some of the most difficult decisions we need to make”
HP’s bombshell came as it unveiled a 4.2% year-on-year rise in Q3 revenues.
Personal Systems net revenue rose 8% year on year to $10.4bn, with Lores estimating that around 60% of the installed base have moved to Windows 11.
“We have seen the conversion happening faster in the enterprise space and also in North America. The biggest opportunity now is going to be in SMB, and in Europe and in Asia,” he said on an earnings call (see here).
Printing net revenue fell 4% to $4.3bn, however.
Lores said the workforce cuts will involve “some of the most difficult decisions we need to make”, adding that HP “is committed to treating our colleagues with care and respect”.
“As we look ahead, we see a significant opportunity to embed AI into HP, to accelerate product innovation, improve customer satisfaction, and boost productivity,” he said.
Doug Woodburn is editor of IT Channel Oxygen
