Hewlett Packard Enterprise (HPE), the tech company headquartered in Spring, has announced plans to cut approximately 2,500 employees, or about 5 percent of its total workforce, through layoffs and attrition over the next 18 months as it aims to reduce operating costs. The layoffs were revealed in a document filed with the Securities and Exchange Commission and announced during the company's first-quarter earnings call, as reported by the Houston Chronicle.
The company, which currently employs over 60,000 individuals globally and more than 2,000 in the Houston area since relocating its headquarters from San Jose, California to Spring in 2022, has not specified the exact number of local employees affected by the job cuts. However, HPE's CEO Antonio Neri admitted during a conference call that "We could have executed better," citing particularly a shift in demand for the newest graphics processing units leading to an excess inventory of older models, according to the same source.
HPE showed a rise in revenue for the quarter ended Jan. 31, reaching $7.9 billion, which is a 16.9% increase from the previous year's first quarter, yet the company's CFO, Marie Myers, voiced concerns over the impact of new tariffs on imports from Mexico, Canada, and China potentially affecting future outlooks. While HPE has begun cutting spending in certain areas, it expects the greatest impact of these tariffs in the upcoming months, as strategies to mitigate their effects are underway, the Houston Chronicle detailed.
In the same statement, Myers also outlined the expected cost savings from the workforce reduction, totaling around $350 million by fiscal year 2027. Neri is considered one of Houston's top-paid executives, with a reported compensation package exceeding $20 million in 2023, placing him ninth in the region, and in addition to workforce cutbacks, HPE is also gearing up to defend its proposed $14 billion acquisition of Juniper Networks in court, against a lawsuit filed by the Department of Justice, which the CEO calls "fundamentally flawed," as mentioned in the Houston Chronicle.
