back to article What's HPE Next? Now it's unemployment for 'thousands' of staff

HPE kicked off its much-dreaded layoffs globally on Monday as part of its Next overhaul campaign. The cuts were expected, but still cast a pall over the enterprise IT giant. In June, we revealed the existence of the HPE Next project: a radical three-year plan to overhaul HPE's processes and investments, and optimize its people …

  1. Anonymous Coward
    Anonymous Coward

    Really?? Wonder if the Atlanta, GA based Storage Unit is "safe" from those staff "redundancies". It would be a shame if the lot who fled IBM to go to HPE's Storage Unit were suddenly made "redundant". Given that most of them have been around for a year or less, who do you think HPE would be walking to the door?

  2. Mikel

    Clinging to share in a shrinking no-margin market

    Doesn't take a rocket surgeon to figure out what will happen here.

    1. Kane Silver badge
      Boffin

      Re: Clinging to share in a shrinking no-margin market

      "Doesn't take a rocket surgeon to figure out what will happen here."

      Nor a brain scientist.

    2. boltar Silver badge

      Re: Clinging to share in a shrinking no-margin market

      Smart companies create a market. Sadly HP* lost its mojo years ago, they have no new ideas and just keep hiring a succession of by-the-book moron CEOs who's only solution to shrinking profits is cost cutting. And once they've cut everything to the bone and 1 years accounts look good they'll be hailed as a saviour , collect their golden paycheque and fuck off, leaving the house of cards to collapse after they're gone.

      1. ecofeco Silver badge

        Re: Clinging to share in a shrinking no-margin market

        HP lost it when H and P retired and the MBA weasels took over.

    3. Ian Michael Gumby Silver badge
      Boffin

      Re: Clinging to share in a shrinking no-margin market

      Funny, but how's SuperMicro making a large profit?

      I think the question is... how HP plans to sell commodity products at 2x the retail price?

  3. Mark 85 Silver badge

    So.. they slash expenses, get rid of all the people who know stuff and how to, and offshore/outsource even more. The stock price will jump up this quarter and maybe next couple and the shareholders will be happy for the "returned value".... Then what? At the end of the 3 years, HP will be a shell of it's former self and struggling again, if not before. Those who live by the quarterly statements, die by them.

    1. Yet Another Anonymous coward Silver badge

      Simple- you just do it again.

      If you fire 5000 people and save $1.5 Bn then you just need to keep doing that every year and after 11 years you will be profitable (*)

      (*) assuming income is unaffected by having no staff

      1. Jack of Shadows Silver badge
        Thumb Down

        The Ginni Rometty strategy to corporate dominance. Not.

      2. This post has been deleted by its author

      3. Anonymous Coward
        Anonymous Coward

        @Yet Another Anonymous coward; Of course, you eventually run out of people to fire- but I'm just waiting for someone to legalise an accounting strategy that lets them benefit from the profit/loss/whatever accrued from firing "projected" employees they don't currently employ yet (and probably never will).

        What's pathetic is that this only sounds mildly satirical, given what US accounting rules already let them get away with. It wouldn't even entirely surprise me if this turned out to be already possible via abuse of the existing rules and authorities willing to look the other way.

        1. Yet Another Anonymous coward Silver badge

          Futures contracts on employee redundancies - sounds like a good idea.

          We can roll up contracts from different employers into a single collateralized peon package and then securitze that against ...

    2. ToddRundgrensUtopia

      @Mark85

      Sadly western business apart from Germany and few private companies.

    3. Stoneshop Silver badge

      get rid of all the people who know stuff and how to,

      They already did.

      At the end of the 3 years, HP will be a shell of it's former self and struggling again, if not before.

      Which was a shell of its former self already.

      1. Anonymous Coward
        Anonymous Coward

        > Which was a shell of its former self already.

        It's shells all the way down.

  4. Anonymous Coward
    Anonymous Coward

    In a nutshell

    if you sold servers at 20% margin and were content with that, you were let go. It's that simple.

    HPE is a very large company with a stale sales mentality and while I don't like to see people losing their livelihood there comes a time where you need to reinvigorate your sales force.

    Whitman is doing the right thing.

    1. Steve Davies 3 Silver badge
      Alert

      Re: How Long

      Before this former giant, now Large Company becomes an SME?

      Sad to see Meg do this. She's probably made sure that her island in the sun is all bought and paid for (unless she wants to run for POTUS) so hell to the rest of HPE's workforce.

      Their morale can't go any lower can it????

      I think any good staff they have left will be running for the hills. They are doomed.

      Messrs Hewlett and Packard would not have approved.

    2. Anonymous Coward
      Anonymous Coward

      Re: In a nutshell

      This is true. HPE was fat and bloated with something like 8 layers between customer and Meg, now down to about 4. Too much overlay, too many people getting paid on the same deal. It was not sustainable and this was actually long overdue. Customer facing / serving people are not going in the main, it's middle management who the customers won't miss one bit! History will be the judge but I think this is a smart move.

      1. ToddRundgrensUtopia

        Re: In a nutshell

        @AC

        You may be right that HPE are getting rid of the fat middle bit, but fundamentally what are the good reasons to buy HPE:

        1. Best x86 servers, (no better than Lenovo, Dell, Supermicro, etc) and alienate by charging for LOM BIOS on-going support

        2. HPC is tiny, awkward and zero margin. NB How many SGI clusters can NASA buy each year

        3. Superdome, (tiny market, although very profitable

        4. Cloud providers go with minimalist design from the Chinese ODMs

        5. Storage, decent product set, but nothing amazing. Competition from low cost x86 based object stores drives down margins

        It's a slow, maybe very slow road to extinction. HPE The Eastman Kodak of enterprise IT

        1. EarthDog

          Re: In a nutshell

          In all of those areas you can pick up some of the slack by sing you services division. Oh..... wait....

      2. Anonymous Coward
        Anonymous Coward

        Re: In a nutshell

        "Customer facing...are not going" - err, you did read the part where it says "pre-sales" will be chopped, right?!

        Last time I checked, pre-sales people are ALL customer-facing. I've been one at IBM and I work with the HPE guys now, while at a partner software company.

        Generally speaking, HPE is going through what IBM went through back in 2014, when it (mistakenly) sold its enterprise x86 server business to Lenovo.

        My concern is that I'm not sure it's the right thing to do; Ginni Rometty has bet the farm on CAMSS (Cloud, Analytics, Mobile, Social, Security - or SCAMS, as the IBM employees like to cal it) but has it really worked out for them? What is the most profitable part of IBM at the moment? What will be the most profitable part of HPE, after all these staff chops?

        1. Not also known as SC

          Re: In a nutshell

          "pre-sales people" - is this a US / marketing term? I'm not entirely sure what it means so could some one explain what sort of job pre-sales involves for those of us working in different environments?

          1. Anonymous Coward
            Anonymous Coward

            Re: In a nutshell

            It means sales engineers, the people who technically understand the product and explain it to the customer, can dimension it, point out the sharp edges, and generally keep the sales people's more outlandish claims from making it anywhere near the customer.

            There's a plaque at Stanford next to the original HP oscillator that explains what HP's sales engineers were supposed to do, namely advocate hard for the customer and in turn be valued by HP. We seem to have come a long way downhill since then.

            I can't blame MW for seeking to stem the bleeding but it's a tragedy that HPE has come to this. All the iconic technology companies I grew up with and cut my teeth on are gone. SGI, DEC, Sun, HPE...:(

          2. Anonymous Coward
            Anonymous Coward

            Re: In a nutshell

            >"pre-sales people" - is this a US / marketing term? I'm not entirely sure what it means so could some one explain what sort of job pre-sales involves for those of us working in different environments?

            Pre-sales are those people that take a nebulous customer idea and turn it into a workable product list that the "actual" sales people can then give to the customer and persuade them to sign on the dotted line. Usually a lot of customer workshops and a bit of design involved.

          3. Anonymous Coward
            Anonymous Coward

            Re: In a nutshell

            "is this a US / marketing term?"

            No. It's a sales term. It means the technical person involved in the sale (often called a Sales Engineer/SE) as opposed to the non-technical money man involved in the sale (often called an Account Executive/AE). Someone who's got just enough technical knowledge to be dangerous and is motivated principally by commission rather than success.

            Contrast with post sales, usually referring to highly specialised field engineering personnel who have to go in after the fact and calmly explain to the customer why the SE's slick demo might not actually bear any resemblance to reality.

            1. Anonymous Coward
              Anonymous Coward

              Re: In a nutshell

              Contrast with post sales, usually referring to highly specialised field engineering personnel who have to go in after the fact and calmly explain to the customer why the SE's slick demo might not actually bear any resemblance to reality.

              My experience, as a (non-HP) developer, is the reverse. Pre-sales really know the technical details of the product and can help the customer create a good solution, often with the developer's' help. It's the post-sales guys who come in to do the install and setup and screw that up, usually due to an inability to read the documentation. Then they come crying for help to the developers.

              1. Anonymous Coward
                Anonymous Coward

                Re: In a nutshell

                >My experience, as a (non-HP) developer, is the reverse. Pre-sales really know the technical details of the product and can help the customer create a good solution, often with the developer's' help. It's the post-sales guys who come in to do the install and setup and screw that up, usually due to an inability to read the documentation. Then they come crying for help to the developers.

                As with all things, it depends on the person. I've worked in both roles and have seen pre-sales create a "solution" which is never going to work, because they've fundamentally not understood what the product is supposed to do, or misconfigured it, e.g. not configuring hot spares or allowing for parity in a storage system, or forgetting licences or something like that. It happens.

                And in post-sales, you're right; sometimes the guy who's supposed to be configuring it isn't an expert and doesn't know what he's doing. So he'll make fundamental errors that will come back and bite later.

                It's all down to experience foremost, and education. I've been in the situation (when working for a large company, not HP, the other one) and my boss has said "I want you to be the expert in product X". "Great, so I can get some training?" "No, there's no budget (even though the customer is paying 6- or 7- figure sums). You'll have to work it out yourself".

                Then there's the fact that when companies like this reinvent themselves, they sack all of those with the skills because they cost more.

            2. Not also known as SC
              Pint

              Re: In a nutshell

              Thanks

              For everyone who took the time to explain ----------------->

          4. Smudger 1

            Re: In a nutshell

            "Pre-sales people" are just that - people who work on a project before the customer has placed an order or the contract is won.

            Sales people in small IT businesses are expected to be sales-orientated technical people. They may have shared access to technical experts on an ad-hoc basis.

            However, winning a large contracts involves more than meeting-and-greeting, drawing up a two or three page proposal and closing the deal - there can be a raft of technical consultancy, architecture planning, system specification, BOM/BOQ/proposal generation, installation-costing, licensing negotiation, support agreement negotiation, training services negotiation and graphic design/presentation work - largely undertaken by qualified professionals. These are the "pre-sales people". Their work is often wasted if the company does not win the order.

            There are, of course, post-sales people who can do all this stuff as well - but they're too busy delivering projects HPE already won.

    3. teknopaul Bronze badge

      Re: In a nutshell

      If you have a huge workforce and you can't think of anything to do with them to make a bit of money, you are a failure of a manager.

  5. FozzyBear Silver badge
    Trollface

    with US pre-sales teams taking a big hit.

    "Well of course we don't need them anymore, we're not selling any products?

    Some $700m of those savings will be plowed back into the biz.

    "Of course due to the massive savings we have made , most of this will be soaked up by the exec team in bonuses"

    Read between the lines and you can almost hear the troll speaking these words.

    <shiver>

    The icon really doesn't do her justice, does it?

    1. Nolveys Silver badge

      Some $700m of those savings will be plowed back into the biz.

      They just announced they are spending $2B on stock buybacks, a clear and effective way to invest in themselves. It just makes sense to fund the company with the money they will save by firing everyone.

      Say, if they buy all their stock back does the share price become infinite?

      1. Anonymous Coward
        Anonymous Coward

        > They just announced they are spending $2B on stock buybacks.

        "They just announced they are spending $2B to pump up the stock price for the execs."

        FTFY.

  6. Anonymous Coward
    Anonymous Coward

    Her cup runneth over...

    There are VAMPIRES who would feel guilty about the amount that has been sucked out of HP!

  7. h3nb45h3r
    Mushroom

    I have a theory as to why HPE like getting rid of people...

    Do you think Meg was bullied as a kid?

  8. DougS Silver badge

    Whatever the situation, layoffs are the answer

    Just did a major merger, like when they bought Compaq? Time for some layoffs. Just did a big split, like when they spun off DXC? Time for some layoffs.

    Inevitably some of those they layoff (or scare away) will have been generating a lot of value for the company, so the layoffs will cause a revenue drop. Then it will be - you guessed it - time for some layoffs!

  9. Anonymous Coward
    Anonymous Coward

    optimize its people and overheads to make itself relevant again.

    First thing, get rid of 99% of the MBAs, bean counters and marketing wonks on the board and replace them with engineers,

    Second, cut the salaries of the the upper 60% of management by at least 80% after all most of them never earn what they are getting.

    Third, fire Meg and replace her with someone with engineering knowledge.

    Doing the above might pull the company back from the brink of destruction, the present policy won't.

    1. Doctor Syntax Silver badge

      @Ivan 4

      Maybe you need a 1 place circular shift in that list.

      1. Anonymous Coward
        Anonymous Coward

        Thinking about it you are right.

      2. Fatman Silver badge
        Joke

        RE: Maybe you need a 1 place circular shift in that list.

        You noticed that too!

        I would have made it more comprehensible by simply stating that the 'priority list' was in reverse order.

  10. chivo243 Silver badge
    Unhappy

    HPE = Hydra?

    I've given up finding anything useful on the HPE website, search there for one thing, bumped to a different division of HPE, but completely irrelevant to what you need or want. Google seems to find what you need better than HPE on THEIR OWN SITE. WTF? Servers, desktops, laptops, printers, software for other companies... what's next Ivory back scratchers?

    1. russsh

      Re: HPE = Hydra?

      Ah yes, but their digital engagement score (dwell time on site) is through the roof.

    2. Stoneshop Silver badge

      Re: HPE = Hydra?

      Google seems to find what you need better than HPE on THEIR OWN SITE. WTF?

      That's been the case since, um, Altavista.

  11. Hans 1 Silver badge
    Holmes

    | Hybrid IT with Cloud | Mobile & IoT |IT for Data & Analytics | HPE Pointnext | How to Buy | Contact

    That is the menu on HPE's website ... a bunch of meaningless marketing buzzwords coupled with "How to Buy" (in case you would not know) and Contact, the only relevant item in the menu, if you ask me.

    No wonder they sell nothing ...

  12. ptbbot

    Nice to see the Exec board have time to post comments on this article here!

  13. Anonymous Coward
    Anonymous Coward

    reduce to sell ?

    Its seems the strategy of HPE is to make the company ready to be bought by a other IT giant in next 3 years ?

    1. Naselus

      Re: reduce to sell ?

      Yup. That's basically what an MBA teaches you to do nowadays.

  14. Doctor Syntax Silver badge

    As the people being let go find jobs some of them will go to customers or potential customers. And so HPE's* customers and potential customers are staffed with folks with a strong aversion to HPE. It's going to work out really well for future sales.

    *Or any of the others doing the same thing.

    1. Stoneshop Silver badge
      Flame

      As the people being let go find jobs some of them will go to customers or potential customers.

      Not that long ago my then-manager asked me what my thoughts were on hiring our 'default' HP (not HPE yet at that time) CSE, to make sure we still had a competent and knowledgeable guy to service the pile of stuff we run. I could see his reasons, but it would cut the CSE off from their in-house diagnostic tools, and probably make parts exchange more complicated. And I wish I could cite access to 3-rd line support as well, but given their quality it's a non-issue.

      I expect this matter to come up again shortly.

  15. Anonymous Coward
    Facepalm

    Real Estate Sales

    These payments will be partially offset by real estate sales, which should generate approximately $300 million in cash over the next three years.

    Been there, done that, but it didn't help IBM in the long term did it?

  16. adam payne Silver badge

    Two thirds of your brilliant plan is to lay off staff, what's the other third? take upper management on holiday for a week?

    If you get rid of a lot of your pre-sales people who is going to bring in the potential customers?

    1. Anonymous Coward
      Anonymous Coward

      The "other third" of the plan is intending to be out of there *before* the consequences of their short-termist, artificially-puffed-up-profits-via-redundancies hit the fan.

      As it always is.

    2. Doctor Syntax Silver badge

      "take upper management on holiday for a week?"

      Take them on holiday for a week to somewhere where communications and transport are non-existent and leave them there.

  17. handleoclast Silver badge
    Coat

    Bye-bye

    I could love you, but why begin it

    'Cause there ain't any future in it

    She's got me, but I'm not free, so

    Bye bye HP, HP goodbye

    (Bye HP, HP bye bye)

    Bye bye HP, don't make me cry

    (Bye HP, HP bye bye)

    Yeah, it's HPE not HP, but that doesn't scan. Anyway, she'll wreck HP as well, soon enough.

  18. Doctor Huh?

    Layoffs, the answer to every problem.

    HPE wants to be relevant again. I suppose they could go back to making products that people want to buy at prices they want to pay (hint -- they can't), or... they could fire staff. Stockholders and The Street love that, because it shows "commitment" or some such nonsense. And, despite the fact that every talentless hack of a struggling CEO starts shedding staff to prop up shaky numbers, some investment dolts still think that laying people off shows a CEO who is unafraid to "make the tough decisions."

    HP was once a great company. Now it isn't even a shadow of its former self. Maybe Meg can give a valedictory address as cool as Roy Blatty's...

  19. Hans 1 Silver badge
    Meh

    Matt Bryant ?

    Where is our cherished HP fanboy in times of need ?

    Have not seen him in a long time, probably got the axe last time ... if this were the case, Matt, we disagree fundamentally on many things as we both know, I still hope you are ok, though.

    The more you differ from me, the more you enrich me ;-)! Apologies to Antoine de Saint Exupery ... Antoine's take on it was: "If you differ from me, you do not offend but rather enrich me!"

  20. Anonymous Coward
    Anonymous Coward

    First we get

    India Business Machines

    Now we get

    Hindu Packard

  21. Anonymous Coward
    Anonymous Coward

    CEO psychopath rapes business for millions $$ in personal gain

    News at 10!

  22. GruntyMcPugh Silver badge

    Last year, myself and another former IBM colleague encouraged another former fellow IBM colleague to take the VR offer on the table from HP. Glad to say he did, and the total bonus was he was directly hired by the company HP were subbing him to a month later.

    Met him in the boozer for a pint shortly after, he said if he ever has a bad day, he just logs into his online banking and looks at his balance,.... so we drank to that :-)

  23. Anonymous Coward
    Anonymous Coward

    Sad.

    I was with HP '95 - '07 when I opted for Mark Hurd's Enhanced Early Retirement offer which was very generous and then my new employer put me back at HP as a full time consultant for 8 more years. I always felt the people there were afraid of their own shadow and could not think out of the box. Many came to HP straight out of college and never left. I can't recall any major product development in my time there, only acquisitions of which many were failures and costly. HP just grew stale from hiring practices based on quotas imo. In the end I couldn't get out of there fast enough.

  24. Anonymous Coward
    Anonymous Coward

    Meg, the one trick pony

    All she has done is divide the companies up and get rid of people.

    She has no real strategy as to how to make HPE relevant again.

    With the "move to the cloud" mantra why will anyway buy HPE servers kit anymore. Companies will just virtually rent it in Azure or AWS and these guys tend to use their own custom kit now.

    Next quarter will be exactly the same, slash jobs to save money. Soon their will be no cost savings to be made as their will be no staff to fire.

  25. doug_bostrom

    Always striking how these great leaps forward include a tacit admission: management screwed up massively, hired thousands of people by accident without noticing they were not doing any useful work.

    Ideally the great leap forward would begin with a purge of incompetence at the top but somehow that almost never happens.

  26. John 104

    Cut Executive Pay?

    I don't see any mention of reducing exorbitant pay of executives to help the bottom line. Funny that.

    Still love my HP laserjets though.

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