HPE's Black Thursday: Staff face pay cuts or the ax, office closures to save $1bn+ after coronavirus slams IT titan

HPE has vowed to slash its spending by at least $1bn after it suffered a disastrous financial quarter, primarily blaming its downfall on the effects of the coronavirus pandemic on its supply chain and customers. We're told it has more than more than $1.5bn in orders for servers, storage, supercomputer parts and other data …

[Anonymous Coward]

The unpaid time off is not just for those who do not take pay cuts - both are in force wherever legally permitted, though the unpaid time off can be opted out of. No retaliation is threatened for those who opt out. That they happen to be among the first cut in the next go-round will be purely coincidence.

[Anonymous Coward]

Memo sent out was edited. Now US based employees have the pay cut, and those outside the US get the unpaid time off. Apologies for implying the Vulture might have been incorrect.

[Anonymous Coward]

"products will be streamlined and rejigged to be offered as-a-service"

I'm not wholly opposed to that, but

A) Isn't this pretty "me too" at this point, after IBM and Oracle have already been at this transition for years, and MS, Google and Amazon have already grabbed huge market share since they were already service companies.

B) "As-a-service" has a definite value for a hardware company who wants predictable, contractual revenue streams instead of an amalgamation of discrete sales that can tank in situations like we have now, but how is HPE going to make this valuable for its customers?

[elip]

Re: "products will be streamlined and rejigged to be offered as-a-service"

...and more importantly...hasn't HP/HPE tried this already with Hyperion (or whatever it was called), and failed miserably, after their cloud being owned half-to-death lost all credibility?

[Steve K]

Re: "products will be streamlined and rejigged to be offered as-a-service"

Hyperion is Oracle’s, not HPE’s...

[macjules]

HPE has vowed to slash its spending by at least $1bn

Talking of which, isn't the Autonomy hearing due to publish any time now?

[Adelio]

W.F.H

Have been W.F.H since the end of march and so has my wife. Now that we have got used to it it is ok, we go for a walk at luchtime together.

Not everyone has the tools to W.F.H. In our case My wife works using a laptop on the dinning room table and I have an "office" in a spare bedroom.

But if I take my sons example. they have no spare bedroom and no dining table and a 5 year old girl runing around. They just have a living room with a seatee with one laptop. Nowhere for one person to work from home let alone two.

Not everyone has good internet either. Seems like many people in the USA outside of the cities have that issue.

[Anonymous Coward]

Re: W.F.H

> Have been W.F.H since the end of march and so has my wife. Now that we have got used to it it is ok, we go for a walk at luchtime together.

I read that as lurchtime and I wondered just how early you started drinking ;-)

[Smudger_329]

Re: W.F.H

Much as I'm a supporter of WfH, it's got to be for those that it suits.

Personally, I'm well set up - dual monitors, decent internet access, strong mobile phone signal. But that doesn't work for everybody.

Companies will need to bear this in mind if they start rushing to close their office space!

[Jimmy2Cows]

Re: dual monitors

Only two...? Pfft. Amatuer. Real WFH men* have at least 3.

[Sets himself up for similar disparaging remarks about only having 3 monitors...]

*Yes, and women, and whatever non-binary gender one may happen to assume at the time. But that wouldn't fit the meme, would it.

[Steve K]

Re: dual monitors

At this point it is customary to remind readers of Sir Terry Pratchett’s response to why he had 6 monitors on his desk:

“Because I don’t have enough space for eight”

[Doctor Syntax]

Back to the future.

Working at home has made businesses re-evaluate their expensive HQs but the answer isn't necessarily to have everyone working in their own home. In the longer term insurance, business rates and H&S issues might crop up.

The other week the CEO of Barclays was interviewed about this and suggested some employees from the big offices could work from branches instead (serves those banks right who've cut themselves off from this option). At last big businesses are realising that it doesn't make sense to set up big offices in big cities that require staff to drag themselves in from the surrounding towns where they live. Smaller hubs in and around those those towns could provide work-spaces for the employees who live there. A sort of WeWork 2.0 could be the provision of such hubs in larger buildings.

In my own locality in the 1950s most people commuted no more than a few hundred yards. There were mills every half mile or less and most people were employed in them. In some cases they would have a mill closer than the nearest bus-stop. Some of those mills still exist, some leased out to small businesses, at least one standing empty for some years. Even if their premises are unsuitable for conversion their sites could be re-built. It would mean employment could move back to where people live.

[cantankerous swineherd]

any word on dividends?

[hidden]

definitely all fine here.

[Anonymous Coward]

Cray?

Any news on how this will affect "Cray, a Hewlett Packard Enterprise company"?

They seem to be in many big machines having won all of the major UK DoE labs next machines, and, of course our own Archer2.

https://www.archer2.ac.uk/

[BebopWeBop]

Many years go, while I was at HP, just after Fiorina arrived (certainly the beginning of the end), we were asked to take a 10% cut to save posts. As far as I am aware (I was not a manager), takeup in our R&D group was about 80%. It lasted for 3 months, following which they promptly slashed and slashed. At least at that time, they were offering decent redundancy terms (which I left on about 8 years later).

Combined with the explanations and choices made, that action destroyed a lot of goodwill - to the companies detriment. A vicious feedback loop that inevitably did not help.

[Anonymous Coward]

Hurd tried something similar in 2010 with a 5% cut to save 25,000 jobs after a bad quarter.

In the UK and other European countries they could not legally impose the cut and had to ask individuals to agree to the cut. According to my manager at the time there was no guarantee full pay would ever return and taking the cut would not guarantee my job so I declined. Anecdotally, so did many others.

Senior managers were asked to take a 10% cut. I remember one of the European leaders saying something like 'managers who are considering refusing should consider whether they are the right type of manager to work at HP'. Nice.

[Doctor Syntax]

"whether they are the right type of manager to work at HP"

Or whether HP was the right type of place to work.

[circusmole]

I must agree that...

...Fiorina was the beginning of the end of a once great company. Since her disastrous time there have been a succession of slash-and-burn CEOs, and one a notable crook, and the latest one has the perfect excuse for continuing this tactic "Well, it's the coronavirus, what else can I do?". The perfect excuse of another CEO with no vision, ambition, plan or drive to see further than keeping stockholders (i.e. gamblers) happy.

Where have all the real leaders and innovators gone?

[rmullen0]

Re: I must agree that...

You hit the nail on the head. The company has been run by one incompetent after another ever since Fiorina.

[TonyJ]

Again?

How many times have HP now made staff redundant in the last decade?

How much can you "best shore*"?

In 2012 they were building a cloud offering that they later ditched because frankly even then it was AWS or Azure.

I really feel sorry for anyone caught up in this but I also wonder why anyone has stuck around so long.

*A genuine term they were using around 5 years ago.

[Anonymous Coward]

Re: Again?

"In 2012 they were building a cloud offering that they later ditched because frankly even then it was AWS or Azure."

Ah, Helion-C...I remember those days. It had no hope against AWS and Azure.

Helion-G (think the 'G' stood for 'Government') I believe is still around, although now part of DXC and under a different name.

[Anonymous Coward]

Re: Again?

> n 2012 they were building a cloud offering that they later ditched because frankly even then it was AWS or Azure.

And of course all their own stuff was moved to Azure, so it's hardly surprising customers didn't want to use their cloud.

Cust: So, which of your company services for you run on your own cloud

Sales: Oh, we don't, we run everything of Azure, but, Mr Customer, you definitely should use our cloud because it's the best.

Cust: So why don't you guys use it then?

...

[Anonymous Coward]

One would think that by now

Both its headcount and spending would be negative, given how often they announce cutbacks to each.

[Tdkuk]

Welcome to the 'New Normal'!

and may your Deity help you if you don't have the right paperwork to show you have antibodies......

[Nick Ryan]

Re: Welcome to the 'New Normal'!

After the current typical failure of the UK's "contact tracing" app (aka incompetently cobbled together spyware) I can't wait for what ridiculous total spyware solution they come up with when it comes up to demonstrating that one has either had the vaccination or has had covid-19 and therefore have antibodies to it (me). Doubtless some central tracking system which will have special exclusions for "celebrities" and "politicians".

[Pascal Monett]

So, slashing headcount again ?

Why is it that I don't recall HP ever doing anything else when "transitioning" ?

Oh, right. It's because that's the only thing they know.

Honestly, those people who submit a CV to HP should really realize that, at best, they're only getting a temp job.

[Anonymous Coward]

Re: So, slashing headcount again ?

The temporary job will be a zero milliseconds contract.

[TonyJ]

Re: So, slashing headcount again ?

"... Re: So, slashing headcount again ?

The temporary job will be a zero milliseconds contract..."

So...zero seconds then...

[EveryTime]

Re: So, slashing headcount again ?

New hires will get provisional positions so that they can be fired without additional expense once the immediate crisis has passed. That 'immediate crisis' is usually caused by laying off someone that was unexpectedly a key person, often someone that quietly did a difficult or knowledge-intensive job and made it look easy and easily-replaced.

[rmullen0]

Re: So, slashing headcount again ?

That's why you have to be strategic and not allow your job to look too easy. You have to $%^& up a little every now and then, and then come to the rescue to get on management's radar. Otherwise, like you say, you will just be taken for granted and overlooked.

[Doctor Syntax]

"The Register has heard all staff bar those in front-line sales will take a hit"

So you'll be able to buy something from them but delivery might be a problem.

[Boris the Cockroach]

HPE wont care that you've bought something if they haven't delivered it....after all they'll have your money without spending any of theirs...

[Anonymous Coward]

Almost all their orders are from the sort of commercial customers who won't be paying anything until it's shipped. Getting the orders in (booking) is all very well, its shipping that's important. I used to work for one of their distributors donkey's years ago. At the end of the month you'd find the directors down in the warehouse making sure everything that could be shipped was so they could be invoiced (billed).

[dinsdale54]

Quite. You can't recognise revenue and sales don't get paid until it lands at the customer.

[Doctor Syntax]

You can't shouldn't recognise revenue

FTFY.

Not everyone does what they should.

[steviebuk]

Another company...

...uses covid to can loads if staff.

[rmullen0]

HPE support is attrocious and is deliberately designed to not uphold warranty

In the 1990s I bought a 8 port switch. The switch had a lifetime warranty. It failed probably 10 to 15 years later. I figured it would be a long shot, but, contacted HP to see if I could get a replacement. They sent me the equivalent new model, no questions asked. I thought, wow, what an excellent organization. More recently I an HPE switch which also had a lifetime warranty. It failed after less than a year. I found that HPE's support (apparently handled by a company called Aruba) was absolutely abysmal. It started out talking to someone one in a far away country with extremely poor phone service. It was so garbled I could barely understand what they were saying. Personally, I wonder if it was intentional. They told me that I needed to call back during the week, as I didn't have 24/7 support. It took probably a half hour for them to just take down my name and email address, let alone even get to describing the problem. Then, I called back during the normal work week and they told me that they don't warranty products bought on the "gray market" since I had bought it (directly) from Amazon. I told them I was going to complain to the CEO and report them to the FTC. I found the CEO's contact form and indeed did complain to them. And boy what a difference that made. I had like 6 different people urgently trying to contact me by phone and by email. Then, they asked me what company I was with and still didn't want to send me a replacement because my email address wasn't from a corporation. I had to give them my work email otherwise, they still weren't going to let me do the RMA. I personally believe that they intentionally try to make the warranty process so painful that customers just give up. I probably had to talk to 15 different people to get a $50 switch replaced. The elite and the CEOs have done nothing but do their best to drive HP into the ground. Stay away from HPE. They have absolutely horrible support and are undeserving of your business. I pretty sure they follow a script like companies like Comcast do where they put you on hold and intentionally waste your time until you get frustrated and hang up. It's fraud if you ask me.

[a_yank_lurker]

Will the last employee

turn off the lights.

[Anonymous Coward]

They fail to mention that HPE gave away $3 billion dollars in the form of stock buybacks and dividends in an attempt to pump up the stock price. Now they have to show investors that they're willing to exploit their employees mercilessly to make up for their mistakes.

[Anonymous Coward]

Hewlett Private Equity

You can put an 'E' on the end pf it but it's still HP. Meg cut like 85K people and Antonio is Meg's puppy. HPE has the world's most dysfunctional Board. They are ruled by activists, McKinsey and Goldman Sachs, and have brought in one PE-type exec after another to cut cut cut. They get rid of older employees, move 40% to India and China, hire low cost early career hires, reduce development investment, over and over.

Then, what always happens?

(1) their products fall behind so they make an acquisition, and cut more employees to pay for it. "But we won't cut the acquired company employees!" Then they cut them too.

(2) "But we won't cut the sales people,so don't worry, Wall St! We'll make the revenue number!" Then they miss the revenue number. And cut the sales monkeys.

(3) A recession/economic shock/pandemic. HP just has to cut again. For the good of the world.

HPE is a number-missing cost-cutting product-sucking machine run by incompetent CEOs who can't find cloud with both hands.

But they'll be hiring again next year, so by all means...

[jeff_w87]

Higher ups only taking a pay cut for the year - rest of the employees forever

Funny how that works - the rich get richer and the people that made them rich get screwed over again and again.

[Pointer2null]

Base pay vs bonus

All the board will take a cut in base pay eh? Well if you're CEO base pay is about 0.5% of your take home....