Server manufacturer Hewlett Packard Enterprise (HPE, Financial) announced a global workforce reduction of 5%, equating to over 2,500 employees, as part of a cost-saving initiative. This decision comes as the company forecasts its second-quarter revenue to fall short of Wall Street expectations, leading to a 16.5% drop in its stock price during after-hours trading.
The cost-saving plan is expected to continue through the fiscal year 2026, aiming to save approximately $350 million by the fiscal year 2027. As of October 31, 2024, HPE employs nearly 61,000 people. According to Michael Ashley Schulman, Chief Investment Officer at Running Point Capital, HPE's layoffs could have a ripple effect across the industry, potentially impacting the confidence of employees and management in other tech companies.
HPE anticipates its second-quarter revenue to range between $7.2 billion and $7.6 billion, which is below analysts' expectations of $7.93 billion.
