HP Enterprise to lay off 30,000 employees

In a bid to right size its workforce and repair the constant downslide in its market share, HP is issuing pink slips to about 30,000 employees from HP Enterprise.

HP, which will formally split into two companies—Hewlett-Packard Enterprise and HP Inc on November 1, 2015, asserted that the layoffs will help the newly formed enterprise business to manage the weak demand from global markets.

The job cut is aimed at saving $2.7 billion a year, beginning in the fourth quarter, HP said.

Meanwhile, it is learnt that HP is moving more of its workers to lower-cost locations as part of its efforts to cut costs. In its 2013 fiscal year, the company said 36 percent of the employees in HPE worked in low-cost locations against 42 percent this year. HP plans to increase that percentage to 60 percent by 2018.

According to news agency Reuters, the latest job cuts indicate a reduction of the company’s total workforce by at least 10 percent based on the company’s most recent number of more than 300,000 employees as of October 31, 2014, and reflecting the previously announced reduction of 55,000.

“We’ve done a significant amount of work over the past few years to take costs out and simplify processes and these final actions will eliminate the need for any future corporate restructuring,” HPE CEO, Meg Whitman said in a statement.

HP chief financial officer Cathie Lesjak said last month that HP expected the previously announced job cuts of 55,000 under Whitman to increase by up to 5 percent by the end of October.

It must be noted that HPE expects fiscal 2016 revenue to grow in constant currency — driven by continued strength in servers, storage and networking, and stabilization in services and software.

During the split, Whitman had said that HPE will have revenue of more than $50 billion.

Here are some of the key highlights:

• Hewlett Packard Enterprise will have more than $50 billion in annual revenue

• Cloud revenue in fiscal 2015 will be approximately $3 billion, growing over 20 percent annually for the next several years

• Approximately 37 percent of Hewlett Packard Enterprise’s revenue will come from ES

• Approximately 7 percent of Hewlett Packard Enterprise’s revenue will come from software

• Approximately 50 percent of Hewlett Packard Enterprise’s revenue will come from EG, spread across servers, storage, networking, and technology services