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HPE Employment Issues

(Updated November 3, 2017.)

HPE to sell Hanover Street site. (HPI stays on Page Mill Road.) "...right-sized workstations, hot desking options... empower the GenMobile workforce"

"HPE Next" restructuring announced on October 18, 2017

Plans to reduce costs by as much as $200 million to $300 million in the current fiscal year. Aiming for $1.5 billion in cost savings over a three-year period.

Announced at HPE's securities analyst meeting:
- Reducing number of workforce locations from over 100 decentralized locations to 8 central hubs.
- Reducing number of manufacturing locations from 17 to 7.
- Reducing number of volume server platforms from 26 to 10 and value compute from 27 to 7.
- Reducing number of markets served through internal sales reps from 160 countries to the 76 countries that produce 99.5% of sales.
- E-commerce and inside sales for low-profit-margin products.
- Reducing layers between CEO and country sales manager from 6-7 layers to 3-4.
- Moving from ten Enterprise Resource Planning systems to a single global ERP system. 

"We are competing with public cloud, white box and [Software-as-a-Service] providers, so we have to think differently about how we design, build and sell those products."
-- CEO Meg Whitman

"We have too many organizational layers, no clear accountability and our customer-facing employees don't have the empowerment and tools needed to meet their needs. Our execution is simply uneven in a market that is shifting quickly."
--President Antonio Neri

HPE is "doubling down" on the channel and partner ecosystem. "That means doing more with system integrators like Accenture and Wipro that we didn't do much business with when we owned Enterprise Services."
--Whitman

[Should mean some new openings for people with HPE product knowledge at channel partners.] 

http://www.crn.com/news/data-center/300094181/hpe-reduces-internal-comp-plans-from-400-to-25-as-part-of-sweeping-next-overhaul.htm

HP statements on employment:  (Links)

"...an industry-wide shift to highly automated, asset-light delivery of IT infrastructure and applications leading to headcount consolidation." HPE SEC filing Mar 9, 2017  (page 51)

"...how do you keep up with this next generation of IT and how do you bring people into this company for whom it isn't something they have to learn, it is what they know."

"...we need to return to a labor pyramid that really looks like a triangle where you have a lot of early career people who bring a lot of knowledge who you're training to move up through your organization, and then people fall out either from a performance perspective or whatever... we put in place an informal rule... when you are replacing someone, really think about the new style of IT skills."

"...eventually you will wear out. Not many people can last for twenty or thirty years, which is why we need to attract young people."

"Employees were selected for the reduction in force because the job they were performing will no longer continue, their skill set was not applicable to the Company’s or organization’s operations going forward, and/or other employees were viewed as better qualified because of past performance and competency evaluation, which may include skills, abilities, knowledge and experience." From the legally-required Attachment A provided to those 40 or over.

HPE US formal rehire policy: "After this 60-day period, you are ineligible for rehire... Additionally, former employees who left under a severance agreement or enhanced early retirement, workforce reduction or similar circumstances (e.g., MSA or ETA) are not eligible to return to HPE as an agency contractor."

"The changes to the workforce will vary by country, based on local legal requirements and consultations with employee works councils and other employee representatives." Typical SEC filing

The formal policies do not apply to people who resigned without a payment, however members report that recruiters and hiring managers assume that they received payment and are therefore not eligible for rehire.

Returning via an agency or contractor no longer works. They are required to submit SSNs.

The current formal and informal rehire policies do not contradict any previous version of the Waiver and General Release that you signed in order to be paid severance or a retirement incentive. Read your actual agreement. You agreed not to apply for employment for a certain time period -- and you acknowledged that you are not entitled to future employment. Sample Waivers 

Find out what the company is telling Wall Street about employment prospects and strategic issues that will affect your career. Read the transcripts of the quarterly analyst conference calls -- especially the Q-and-A sections.
http://investors.hpe.com/news-and-events#investor-events [Click "Past Events"] 

"When ES went to DXC 110,000 people left this organization, and it was in some way is like the tide going out. You could see where there were real opportunities to improve." Decreasing the layers in our customer-facing organization. Reducing the number of markets that we operate in. Shift roles from high cost countries to low cost countries.
Q3FY17 Earnings Call 

"...the usual suspects. It's the travel, it's the consultants, it's the contractors, it's the rehiring rates, and we continue to do that."
"...we had a regional, we had a sub-regional, and we had a country... we don't need all this infrastructure."
Deutsche Bank Technology Conference, September 12, 2017.

"...de-layering as we right-size the organization ahead of the separation from ES and SW... "...the overhead structure that was required to knit together the old HP and then Hewlett Packard Enterprise was a pretty high overhead structure, because of the diversity of the businesses. We ought to be able to run much leaner and meaner..." Q4FY16 Earnings Call 

"Fiscal 2015 Restructuring Plan... As of April 30, 2017 , the Company now expects up to approximately 12,200 employees to exit the Company by the end of 2018, of which approximately 4,000 remain as of April 30, 2017."
"Fiscal 2012 Restructuring Plan... As of April 30, 2017, the Company had eliminated 12,700 positions, with a portion of those employees exiting the Company as part of voluntary enhanced
early retirement ("EER") programs in the U.S. and in certain other countries. As of April 30, 2017, the plan is substantially complete, with no further positions being eliminated."
SEC filing June 8, 2017

Key Q-and-A exchange...  Morgan Stanley analyst: "...how should we think about incremental cost takeout, as we head into next year post the software divestiture, is that $200 (million) to $300 million run rate or more like $400 (million) to $600 million for the full-year the right run rate to think about for next year?"  

Tim Stonesifer, HPE CFO: "...given the spinoff and now the fact that we have 110,000 fewer people and we've had a little bit of time under our belt to operate in the new model, if you will, we do think there are opportunities and there are going to be opportunities in the usual suspects."  "...roughly half of that $200 million to $300 million is more of the discretionary type stuff like policies, like travel and then the other half is labor related and within that labor piece, I'd break it out into two components. I think half of that is really around lowering our rehire rates, taking a look at contractors."    Q2 HPE Earnings Call, May 31, 2017.  http://investors.hpe.com/~/media/Files/H/HP-Enterprise-IR/documents/q2-2017-earnings-transcript.pdf

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