As Hewlett-Packard prepares to spin off its Enterprise Services (ES) business into Hewlett Packard Enterprise, it has been recently announced that big changes are on the way. This includes a number of restructuring activities that will also see the laying off of about 25,000 to 30,000 workers to help Hewlett Packard Enterprise achieve an ongoing annual cost reduction of $2.7 billion and ongoing cost savings of $0.7 billion.
Meg Whitman, the current Chairman, President and Chief Executive Officer of HP, will soon become the President and Chief Executive Officer of the Hewlett Packard Enterprise. Of the restructuring, she explains that it will help the new independent company to become more competitive while backed up by cost sustainability. And as for future restructuring, she remarked, “We’ve done a significant amount of work over the past few years to take costs out and simplify processes and these final actions will eliminate the need for any future corporate restructuring.”
The restructuring related activities also include other organizations across the company’s portfolio as well as some adjustments when it comes to real estate. It is also hoped that the soon to be spun off ES business unit will achieve about $2 billion in gross annualized cost reductions.
The Hewlett Packard Enterprise is an ambitious new organization that aims to do business more modestly than its parent company. It expects to bring in more than $50 billion in annual revenue, but it plans to do so by operating on a smaller scale and putting focus on what HP does best: infrastructure, cloud, software and services. Moreover, it aims to offer integrated technology solutions, a market which can possibly grow to over $1 trillion in the next three years.
Hewlett Packard Enterprise shall be trading the ticker symbol “HPE.”