[News] HPE to Cut 2,500 Jobs as Server Profits Drop and Revenue Falls Short of Estimates

According to a report from ijiwei, citing CNBC and Reuters, Hewlett Packard Enterprise (HPE) has announced a layoff plan. The report states that HPE will lay off 2,500 employees in the next 18 months, accounting for approximately 5% of its workforce, including expected attrition. As of October 31, the company had nearly 61,000 employees, according to HPE’s annual report.

As noted by Reuters, the layoff plan was driven by the company’s annual profit forecast falling short of investor expectations. The report states that HPE projected revenue between USD 7.2 billion and USD 7.6 billion for the second quarter, while analysts had expected USD 7.93 billion, according to data compiled by LSEG.

Citing CEO Antonio Neri, the ijiwei report states that HPE’s profitability decline is primarily due to reduced profits in its server division. This is attributed to sales discounts and the accumulation of older-generation semiconductors, which are expected to further pressure profits in the coming quarters.

The CNBC report highlights that HPE held an unusually high inventory of AI servers due to the transition to NVIDIA’s next-generation Blackwell GPUs.

HPE is not the only server manufacturer reducing its workforce. A September 2024 report from Business Insider revealed that Dell is planning additional job cuts and has restricted external hiring until February 2025.

Additionally, tariffs are also expected to impact HPE’s profit outlook, as the report from Reuters indicates.

Meanwhile, as noted by ijiwei, last month, the U.S. Department of Justice filed a lawsuit to block HPE’s USD 14 billion acquisition of Juniper Networks, arguing that the deal would harm competition in the enterprise wireless equipment market. The report indicates that HPE reaffirms its commitment to the deal, expecting it to close by fiscal year-end.

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(Photo credit: HPE)