HPE to cut 2,500 jobs as tariffs rock the market
Hewlett Packard Enterprise (HPE) announced plans to lay off 5% of its global workforce, approximately 2,500 employees, as part of a cost-saving initiative projected to yield USD 350 million in gross savings by fiscal 2027.
The decision comes following a weaker-than-expected revenue forecast. The company cited ongoing trade tensions and tariffs as key factors contributing to market uncertainty, particularly affecting its server business.
HPE’s second-quarter revenue projection stands between USD 7.2 billion and USD 7.6 billion, falling short of analysts’ expectations of USD 7.93 billion, according to LSEG data, reports Reuters. Profit forecasts also did not meet market estimates.
HPE expects to adjust product pricing and optimise its global supply chain to counteract the effects of US tariffs.
Chief Executive Officer Antonio Neri said during a post-earnings call last week that the "forecast reflects its best estimate of the net impact from US tariff policy," the Reuters report continues.
According to CFO Marie Myers, the planned mitigation efforts will take time to implement but are expected to significantly reduce tariff-related impacts in the latter half of the year.
For the first quarter ending January 31, HPE reported revenue of USD 7.85 billion, slightly exceeding analysts’ projections of USD 7.82 billion. The company’s server revenue experienced a 29% YoY increase, reaching USD 4.3 billion.