Hewlett Packard Enterprise said to plan about 5,000 job cuts
(Bloomberg) -- Hewlett Packard Enterprise Co. is planning to cut about 10 percent of its staff, or at least 5,000 workers, according to people familiar with the matter, part of a broader effort to pare expenses as competition mounts.
The reductions are expected to start before the end of the year, said the people, who asked not to be identified because the matter is private. The cuts at the company, which has about 50,000 workers, are likely to affect workers in the U.S. and abroad, including managers, the people said. A Hewlett Packard Enterprise representative didn’t immediately respond to requests for comment.
Chief Executive Officer Meg Whitman has been jettisoning divisions since 2015, including personal computers, printers, business services and key software units. The moves are all part of an effort to make HPE more responsive to a changing industry that’s under pressure from cloud providers such as Amazon.com Inc. and Alphabet Inc.’s Google.
The job cuts “will not create a near -- or long-term -- respite to its structural growth issues,” Bloomberg Intelligence analyst Anand Srinivasan wrote in a note. “These cuts will likely cause charges that may last for one or two quarters. They also don’t address the longer-term sales-growth weakness amid public cloud growth.”
On a call with analysts earlier this month, Whitman said the Palo Alto, California-based company is benefiting from growing demand across key areas of the business. At the same time, she said she’s pushing to cut “layers” in the organization and become more efficient.
“With fewer lines of business and clear strategic priorities, we have the opportunity to create an internal structure and operating model that is simpler, nimbler and faster,” she said.
On the same call, Chief Financial Officer Tim Stonesifer said the company is targeting $1.5 billion in savings over a three-year period.
The shares rose 1 percent to $13.93 at 11:05 a.m. in New York Friday. They have gained 3.6 percent this year.