back to article HPE to staff: 'We are permanently clipping your costs'

A six-month squeeze on staff travel expenses and meal allowances are among the measures Hewlett Packard Enterprise is using to lop up to $300m off its operating costs. Nick Gunn, senior veep of global corporate services, said in an internal memo that HPE needed to "drive efficiencies" in spending and was immediately " …

  1. Bob Vistakin
    Devil

    Banning work from home: same smokescreen as IBM

    This is what comes next.

    It's to sack expensive older workers set in their ways without being accused of doing so, by appearing to give them the choice of traipsing into the office or resigning.

    Hypocrisy of the highest order, considering how big they are on selling the equipment which facilitates doing this.

    1. DougS Silver badge

      Re: Banning work from home: same smokescreen as IBM

      Yeah, that is a pretty stealthy way to dump those older workers, and come up with more "voluntary" resignations so they don't have to lay people off when they outsource more jobs.

  2. Korev Silver badge

    International travel

    For many people international travel can mean short day trips (think working in Brussels to Lille etc.). The extra authorisation is clearly mandated by someone who lives/works in America.

    1. This post has been deleted by its author

      1. Ian Michael Gumby Silver badge
        Mushroom

        Re: International travel

        Hogwash.

        I've seen sales managers who run and work out daily and are in top shape.

        I've seen engineers that are also the same.

        And then I've seen fat slobs in either position.

        As someone who's traveled across the pond... If I travel in coach, even economy plus, there isn't enough room. The seats were not designed for someone who is 6'2" with broad shoulders. And then you have the guy next to you. So you're fighting for shoulder space. Try sleeping twisted and then go to work the next day... it doesn't end well.

        The key question ... do they expect you to function when you land? Also those seats are a death trap if you aren't able to get up and move about.

    2. kain preacher Silver badge

      Re: International travel

      Um what if they have to go to Canada ? Depending on were you are in the US that's not even a day trip but just an hours travel.

    3. a_yank_lurker Silver badge

      Re: International travel

      @Korev - Compounding this is California is a big state coupled with most of the local offices are in large cities. Also, coast-to-coast flights are on the order of 6 hours in the US. So the PHBs running HPE into the ground flunked geography.

  3. Anonymous Coward
    Anonymous Coward

    HPE is doomed

    Behaviour like this will only hasten the end.

    Posting AC as I'm an HP Pensioner.

    1. Anonymous Coward
      Anonymous Coward

      Re: HPE is doomed

      This simply does not work.

      If you want face to face communication to "turn around things quick and right the company"(*) you have to budget specifically for increased internal travel. Alternatively, you have to allow people who are timezone offset from California to work from home.

      Stay in the office until 8pm (HPE Israel - 11 hours offset) because the great californicating ones for whom the rest of the world does not exist cannot be arsed to get in the office before 9am? Screw that sidewize. With a chainsaw.

      Combined with the teleworking ban this shows two things:

      1. Rest of the world outside Cali as far as HPE management is concerned does not exist.

      2. Anyone thinking that they have a career in HPE outside Cali should prep their CV - they will not be around for long.

      Considering how much actual R&D work in HPE is done in Germany and Israel (compared to mostly w*nking at HPE HQ) that means that it is about time to short HPE stock.

      (*)Actual Meg quote from the "teleworking ban"

      1. EarthDog

        Re: HPE is doomed

        I dumped my HPE stock last fall. ANyone who thinks it will come back is a sucker. Any one shorting is has a sure bet.

  4. Amos1

    Corporates still contracting with a TLA company are ripe for trimming "cost inefficiencies" itself

    Two-Letter Acronym or Three-Letter Acronym. CA, CSC, DXC, EMC, HPE, IBM, etc

    I've interviewed at and been approached by companies where senior (old and gray-haired) managers brag about their long-term relationships with these dinosaurs. I've seen those invoices and those companies could speed up their responsiveness to their own customers and employees as well as cutting a butt-load of money off their expenses simply by moving on. Themselves, to another company, so an outsider could come in and demonstrate how to shave millions of dollars and years of time off the bottom line.

    1. Anonymous Coward
      Anonymous Coward

      Re: Corporates still contracting with a TLA company are ripe for trimming "cost inefficiencies"

      cutting a butt-load of money off their expenses simply by moving on.

      Yes, but what about that lovely non-exec directorship for a useless company which one of these 2/3 letter acronyms will acquire shortly for the "talent". Corruption? Of course we are not corrupt.

    2. EarthDog

      When Carly came in and bought Compaq HP management was forced out by Compaq management. Yep, the people who ran COmpaq into the ground. The joke was "Compaq bought HP with HP's money".

    3. Anonymous Coward
      Anonymous Coward

      Re: Corporates still contracting w/ TLA company are ripe for trimming "cost inefficiencies" itself

      moving on [...] to another company, so an outsider could come in and demonstrate how to shave millions of dollars and years of time off the bottom line

      μολὼν λαβέ, whippersnapper.

      1. Amos1

        Re: Corporates still contracting w/ TLA company are ripe for trimming "cost inefficiencies" itself

        "whippersnapper"? *chuckle* I literally have not been called that in over half a century. I'm in my 60's and trying to weigh two job offers. It is true; there is no employment shortage in IT security for qualified people. My biggest challenges literally are the dinosaurs who are making technology and business decisions but who let themselves go obsolete years ago. They're the ones letting the TLA vendors make their decisions for them and their companies are unknowingly paying the price both in dollars and capabilities.

    4. Anonymous Coward
      Anonymous Coward

      Re: Corporates still contracting with a TLA

      Two-Letter Acronym or Three-Letter Acronym. CA, CSC, DXC, EMC, HPE, IBM, etc

      The age of the acroynym companies ended ages ago. From the industrial revolution through 1950s it was "big name" companies e.g. "International Business Machines", "Minnesota Mining & Manufacturing"

      Later, they decided it was too many syllables so IBM, 3M, AT&T, DEC, showed up.

      After than, they decided to make names trendy AND meaningless - "Taligent","Lucent", "Octagiliss","BadgerOne","Flooblesnort", etc.

      And now the meaninglessness continues with company and product names.

  5. Missing Semicolon Silver badge
    FAIL

    Really?

    HPE can cut $150m off it's travel and subsistence budget?

    Colour me not convinced.

    1. Anonymous Coward
      Anonymous Coward

      Re: Really?

      Colour me not convinced.

      Why's that? They reckon that after the DXC divestment they'll have 50-60k staff, so they've only got to save $2,500 per employee from travel and subsistence.

      Soon the travel policy will read "For essential, pre-approved business travel, employees must draw a Stanley knife (on loan, subject to deposit) from stores. This can be used to slit open a curtain-sider in a layby, and to despatch any migrants already hiding in the back, before hiding up in the back and being transported free of charge. Do this in the evening, so that travel is outside working hours. On arrival the same knife can be used to prepare road-kill for a barbecued breakfast. After the meeting the same technique will allow return to base, whereupon the knife must be returned clean and in good condition to the stores to avoid a paycheck deduction."

    2. Anonymous Coward
      Anonymous Coward

      Re: Really?

      HPE (or insert outsourcing company here) can easily cut $150m off its expenses.

      It's not as if it actually cares about providing services to customers anyway, so cut costs and enjoy the bonuses if you're senior enough.

      1. Anonymous Coward
        Anonymous Coward

        Re: Really?

        Only last week I had to deal with an HP bloke whose job it was to do a warranty replacement of a controller card on a SAN unit. Only he refused to comply with the data centre's security procedures so was requested to leave the site (and somehow, I managed to persuade him to leave the parts with me so they could be safely locked in our data centre cage). Amazingly they were able to send another techie who was happy to comply, so we did finally get that controller card replaced.

  6. CCCP

    I read: .."catering polices new norms"

    Wtf? Have they got so desperate that the catering staff are policing compliance?

    Wait...

  7. Anonymous Coward
    Anonymous Coward

    Nothing new

    When I was at HP ES, only customer rebillable travel was allowed and travel approvals went up to the Head of Europe (well their PA) for final approval.

    1. Amos1

      Re: Nothing new

      Yeah, because they clearly have nothing better to do than handle travel requests. That's why their companies are in the toilet, micro-mismanaging instead of selling and visiting customers.

  8. Lost In Clouds of Data
    Paris Hilton

    Why do I get the sinking feeling that...

    ... All these 'cost savings' will be subsequently eaten up by executive bonuses, pay raises and golden parachutes? In addition I can't help but think that the executives will still use whatever excuses they can to fly private or commerical first class whenever the whim or desire takes them, regardless of any actual business reason.

    /Paris again cause she's got more of a clue on how the little people feel than those wankers that come up with these self enrichment schemes.

    1. Vic

      Re: Why do I get the sinking feeling that...

      All these 'cost savings' will be subsequently eaten up by executive bonuses, pay raises and golden parachutes

      They won't. I can guarantee that.

      What will happen is that employees will feel screwed over, so will become less reasonable about their expenses; they will take everything due, rather than just what they thought was a good idea.

      It's always the same - a company tightens its expense policy, and the actual expenses go up. I've seen it way too many times...

      Vic.

  9. lglethal Silver badge
    Go

    Maybe i missed something...

    At the end of the article - Company Operating Profit - $1,76bn.

    Ok Profit is down compared to last year, but i fail to see the urgent need to slash $0,3b when you still have a very tidy profit. If they were losing money or coming out with only marginal profits and worried about sliding into loss, then ok, but this just seems ridiculous.

    The only reason I can see for this is to do with share prices and exec bonuses... So in other words - scum bags...

    1. EarthDog

      Re: Maybe i missed something...

      they have to meet Wall Street expectations. No other reason. Public companies really don't have much control, Wall Street does.

      1. lglethal Silver badge
        Go

        Re: Maybe i missed something...

        Why do they have to meet Wall Streets expectations? This is a genuine question. Unless they're planning to release more Shares (and so need a high Share Price to get more bang for their buck) or they're fighting off a hostile Takeover, having a low share Price means bugger all to a firm pulling in $1,7bn a year in Profit. The only people hurt from a falling share Price would be those who own Shares or execs who are paid in bonus Shares.

        Is there an actual Business case, where not Meeting Wall Street expectations would hurt them?

        1. Anonymous Coward
          Anonymous Coward

          Re: Maybe i missed something...

          Why do they have to meet Wall Streets expectations?

          Because if they don't, the company is labelled "under-performing", and the investors start to demand a change of management. The more passive investors just sell out and move on, but the new owners of those shares are only buying an under-performer on the basis that there's money to be made, so in net terms the shareholder base becomes increasingly "activist". Also, in the US, once you get sufficient shares you can start nominating your own directors (unlike much of Europe) which means that the activists have access to inside information, and are present at board meetings.

          The prospect of being turfed off the mega-bucks gravy train is ample incentive for execs to come up with crap headed cost saving ideas, so it is less common to see the activists having to directly force action - they simply need to build up a notable shareholding, and make their intentions clear, and the most entrenched of boards usually wake and smell the coffee.

    2. Steve K Silver badge

      Re: Maybe i missed something...

      You are looking at the historical numbers already posted.

      It may also be that their post-DXC split forecasts for next year are down by such a degree that they need to pre-empt and cut expenses now.

      Whether they are cutting the right expenses which will not themselves precipitate revenue collapse is another argument entirely (as per IBM and DXC).

      Pissing off revenue-earning staff AND customers at the same time cannot end well.....

      (For avoidance of doubt I am not arguing that pissing off non-revenue earning staff is a good idea either)

  10. ecofeco Silver badge

    At $50 Billion proft last year

    They can't afford travel and meals for the working staff?

    *cough*bullshit*cough*

  11. defiler Silver badge

    "Each of us needs to play a role by spending HPE's money like it's our own"

    Cue dozens of HPE staffers splashing out expenses on new tellies for their homes. I mean, I'd spend my own money on myself and those close to me...

    1. DNTP

      Re: "Each of us needs to play a role by spending HPE's money like it's our own"

      What, you don't voluntarily donate any salary beyond basic survival needs back to your employer? How disloyal.

      (j/k, I don't get paid more than basic survival needs anyway)

      1. Amos1

        Re: "Each of us needs to play a role by spending HPE's money like it's our own"

        Reminds me of a former employer. The CEO sent an impassioned letter (on paper) to everyone asking them to dig deep and donate to the company Political Action Committee (PAC). They asked 1% of gross salary of every hourly and salary employee.

        He was clueless about the Interwebs and the company's Yahoo message board soon had a post listing the contributions to the company PAC as obtained from a public website. Instead of filling out a separate form for each company officer contributing, they put them all on the same form even though most contributions were below the reportable limit. The previous year the CEO contributed a whopping 0.0002% of his salary to the PAC. Had he contributed the full 1% he asked of everyone else, the PAC would have hit its goal for the next year and a half.

        The interesting part was that the disclosure form had to list the contributor's salary and contribution. We found out that some managers were paid far, far more than anyone had guessed. And they never asked us to contribute to the PAC again.

  12. chivo243 Silver badge
    Trollface

    Cue Monty Burns

    '...to cut between $200m to $300m'

    Darn, I was going to buy that ivory back scratcher...

  13. Christian Berger Silver badge

    Screwed by the cloud?

    It's more like screwed by quality control. In times when they ship Microservers which have a shiny UI BIOS... which fails to boot reliably, with boot loops even long before it even tries to access the OS, it's no wonder people prefer not to buy HP equipment.

    HP used to be about quality. If you find an LaserJet 4 from 1992, it's likely to still work. Later models had obvious problems like paper feeds facing upwards... to get that extra load of dust.

    What happened there is probably the same thing that happened to Siemens. In the 1990s the managment turned over from engineers and physicists to economists. That prevented good engineers from joining and the good ones alread there gradually retired form the company. So gradually the engineering got worse and worse, often accellerated by idiotic cost cutting strategies. This means additional measures to restrain the engineers which squeezes out even more of the good ones.

    HP simply lost that delicate balance between engineering and economics. That's why the products got bad, and that's why they are loosing money now. Not because of some "cloud".

    1. DJSpuddyLizard

      Re: Screwed by the cloud?

      HP used to be about quality. If you find an LaserJet 4 from 1992, it's likely to still work. Later models had obvious problems like paper feeds facing upwards... to get that extra load of dust.

      Exactly. My last HP printer (and I mean last, ever) was an OfficeJet with an apparently known defect in one of the little plastic parts that effectively prevented the paper from feeding after a few months.

    2. NullReference Exception

      Re: Screwed by the cloud?

      Old LaserJet 4's develop problems with the exit rollers and will eventually start jamming on every single page. Might have to find a LaserJet III...

  14. Anonymous Coward
    Anonymous Coward

    Anyone can cut costs. Adding value is a lot harder.

  15. MrKrotos

    This has nothing to do with "cloud" and all about the crap products they now ship out!

    Just like Dell they used to have amazing quality products, now its all meh!

  16. simpfeld

    Was the HP HPE split worth it?

    As soon as they split I had a phone call from sales people from both HP and HPE. They seemed to not totally know which piece controlled which product lines if they were a bit obscure (presumably this is clearer now).

    This split just seemed to lead to needing to duplicate staff in many functions for the two new companies. Driving up costs.

    I don't have enough experience of these new companies but have end customers seen a massive benefit to these new businesses being more "focused"?

    Call me cynic, but the main benefit of the split would seem to be an exec who probably got a massive bonus for this business "innovation". Or maybe execs getting promoted as there are now two sets of senior exec positions to fill! And associated costs

    Happy to be told otherwise by people who know more.....

    1. Anonymous Coward
      Anonymous Coward

      Re: Was the HP HPE split worth it?

      I remember talking to HP reps when they were first due to split during Apotheker and they had the answers ready ("more agile as single units" and so on). When the split was cancelled they again had the answers ready ("unity brings happiness" or whatever), and when they did split they once again were coached ("united we fall, divided we stand" or somesuch)

      I never did understand either why there was a need for a split, and I'm uncertain whether there still are some sort of connections between the companies.

    2. Anonymous Coward
      Anonymous Coward

      Re: Was the HP HPE split worth it?

      The reason for the split was never satisfactorily explained. When asked, the response was something like 'We are doing this from a position of strength', which is a statement and not a reason.

      My take on it is that Meg's much vaunted turnaround wasn't happening, or wasn't happening fast enough so she decided to get rid of a big chunk into HP Inc, perhaps thinking turning around a smaller entity would be easier...it hasn't worked that way.

  17. Anonymous Coward
    Anonymous Coward

    Cut travel costs??

    The obvious thing to note here is that they might start at the top. The private jet that Ms. Meg flies around is still being used.

    On one hand it might be a good thing to cut back in executive travel (I do own HP stock), on the other hand, that should keep it up (I have a niece that works in that department). Tough choice for me, thus AC.

    Keeping managers from traveling is probably a "good thing" (insert Martha Stewart voice here), and the people who get things done (anyone below a manager) should be allowed to travel as necessary (which sadly it isn't much these days with remote access).

    Life goes on...

  18. Anonymous Coward
    Anonymous Coward

    Wonder if any of the recent hires to the HPE Storage Group are included in those "Cost Cutting Measures"...

  19. Anonymous Coward
    Anonymous Coward

    The old giants are falling as they fail in their attempts reach for the clouds.

    1. Bob Vistakin
      Holmes

      That's my take on this too.

      It's no co-incidence all these computing giants are falling at the same time as the rise of the cloud. So they mainly provided "consultancy" to the giant dinosaur servers/networks they themselves provided, or recommended to their customers? And the cloud means they no longer need them? See icon...

  20. Boohoo4u

    Short HPE? What about the airlines? Cutting travel seems to be the new normal...

    1. Amos1

      If the TSA really does ban laptops in the cabin, you might see biz travel drop even more. But it would mean one more checked bag at $25 per leg so their profits might even go up.

  21. Anonymous Coward
    Anonymous Coward

    What do they make

    So exactly what does HPE do for product/business again? They've shed so many pieces I don't see that there's anything left. I could actually see more product/services from the dunderheads at IBM, and that's saying a lot. HPE is seriously in a race with IBM to see who careens into oblivion first.

  22. Florida1920 Silver badge

    Can't travel / Can't work at home

    Does.Not.Compute.

  23. jeff_w87

    If you've had to deal with their support lately (both HP and HPE), you'll find that the split did neither side any favors. It just took 2 weeks to get a keyboard replaced on a laptop and another 5 days on a server issue (we have NBD support) because they didn't have the repair parts on hand. This is not to mention that their tech support site is currently broken (open a new ticket, get errors about 50% of the time and then try to go look at your ticket once it seems to actually be in the system and get an "access denied" error). We're pretty much going to not be buying HP or HPE products again.

  24. gbshore

    Unbelievable. There really was s no more fat to cut... amazing that the current leadership gets a pass on their what looks to be failed strategy. They are now starting to cut bone all in an attempt to keep margins. Punishing your customer facing resources with few creature comforts while traveling all week away from their families is short sighted. It shows that you really don't value your employees and it is only a matter of time when people including the best of the best decide to leave... but hey... Meg will still have her golden parachute as well as other "key" executives.... VERY short sighted and proves that leadership is only about the strategy and that employees are just not that important to her/them.

  25. Anonymous Coward
    Anonymous Coward

    Nothing new here....

    I think these are appropriate:

    http://dilbert.com/strip/1995-08-24

    http://dilbert.com/strip/2009-02-16

  26. SniperPenguin

    "travel pre-approval process and tool"

    "A shiny new "travel pre-approval process and tool" has been launched...."

    Who wants to bet that this cost far more than what will be saved stopping the travelling engineers going somewhere better than Greggs for lunch?

  27. the Jim bloke Silver badge

    Cutting Meals

    Stop feeding your employees, and eventually you can stop paying them...

  28. kain preacher Silver badge

    Dear valued assets err associates um employees. HP will now be charging a $5 cover charge to enter the cafeteria. Please member only approved eating utensils are allowed in the cafeteria. These eating utensils can be purchased in the lobby or the cafeteria. Please note that at the beginning of next month we will be charging for toilet papers. 15 cents per squared inch. oh and do not forget to purchase electricity before coming to work.

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