The Axe Falls at HPE
Hewlett Packard Enterprise Co (NYSE:HPE) has started enacting layoffs that were promised as part of a larger cost-cutting effort. The company, which was formed when Hewlett Packard Co. was carved up piecemeal, is looking to slim down and recover from the breakup with HP Inc.
Rumors about the job cuts started floating around before they were verified by HPE spokeswoman Meghan Fintland. She spoke with GeekWire and confirmed that “previously announced restructuring changes took place.”
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“Workforce changes that are part of a company-wide strategy to give HPE the needed workforce to be a more nimble customer and partner-centric company,” Fintland told GeekWire. (Source: “Hewlett Packard Enterprise faces layoffs and spinoff fallout,” Silicon Valley Business Journal, October 19, 2016.)
The changes came in the same week as HPE’s annual security conference, during which analysts gather in San Francisco to hear the company’s growth expectations for the year.
According to a report by The Wall Street Journal, HPE forecasted a minor fall in revenues over the next 12 months. However, that decline will only happen if the firm’s architecture does not change, something that CEO Meg Whitman is expected to do in short order.
For the most part, investor concerns have been assuaged by her plan.
This is despite the fact that profits will fall once the separation from HP is complete. That division sells computer services and software operations, something HPE thought would be better off as an independent company.
In 2017, HPE’s profits with the company still attached would have been between $2.00 and $2.10 per share. But once the split is final, their projected earnings will likely come between $1.45 and $1.55 per share. Not to mention that HPE committed $2.5 billion to a pension fund for its spinoff.
That being said, HPE still intends to return $3.0 billion worth of dividends and stock buybacks next year. Sales of its newly designated core businesses are forecasted to grow as well, while three ancillary portfolios are going up for sale on the IAM Market.
It is an online marketplace for patents and IP. The company wants to pawn off patents related to solar, energy storage, and security.
