Hewlett-Packard Enterprise will reportedly lay off as much as 5,000 employees globally, representing 10 percent of its total workforce, according to reports. A reason was not given, but speculation suggests HPE is trying to drop extra expenses amid competition.
Hewlett-Packard Enterprise To Lay Off 5,000 Employees
HPE will start the reduction process before the year ends, according to Bloomberg. HPE has offices in China, Brazil, and Switzerland. Under current CEO Meg Whitman, HPE was split from Hewlett-Packard in 2015 to become a separate company focusing on servers, software, consulting, and other services.
The move isn't a surprise given Whitman's track record for expelling divisions since 2015, which affected its businesses such as printers, PCs, and others. Under her leadership, the company has been streamlined, ejecting much of its Chinese business and consulting division.
Bloomberg claims the massive layoffs are a way for HPE to compete with cloud providers such as Amazon and Google.
A More Efficient Company
During a call with analysts earlier this month, Whitman said HPE is benefiting from increasing demand across key areas of its business. She also mentioned plans to cut "layers" within the company to make the organizational structure more efficient.
Fewer lines of business coupled with clear strategic priorities, she argued, lends HPE a key opportunity to establish a "simpler, nimbler, and faster" internal structure, in addition to an operating model.
In June, Whitman told CNBC that HPE was nearly finished with one of the largest transformations in the history of American businesses and that investors should expect higher profit margins toward the end of 2017.
Whitman, the former CEO of eBay, was responsible for splitting HP into two main businesses, as mentioned above. One is focused in printers and PCs, the other is focused on servers and storage. Whitman has largely focused on spinning off the company's enterprise services business and merging its enterprise software business.
Whitman had been in talks to become Uber's CEO months after its former CEO Travis Kalanick was dismissed amid a series of allegations. Whitman eventually confirmed she wasn't going to take the job, saying the ride-hailing service wasn't the right fit for her. The job ultimately went to Expedia's Dara Khosrowshahi late August.
Expect due coverage when the layoffs begin toward the end of this year. With a plan to massively reduce its workforce, HPE has to hope it can focus on cloud-based services and perhaps even artificial intelligence to compete with heavyweights the likes of Google.