HPE has embarked on a three year cost cutting programme after posting a lack lustre set of results for the second quarter ended 30th April, with revenues down 16% at $6bn.
The financials are reflective of supply chains being hit and deployments delayed as a result of the pandemic.
In the same quarter last year the company posted a $434m operating profit. This time it disclosed a $834m operating loss.
HPE said it will not provide fiscal year 2020 third quarter or full year financial guidance.
“The global economic lockdowns significantly impacted our fiscal Q2 financial performance,” said Antonio Neri, President and CEO of HPE.
“We are taking decisive steps to navigate the near-term uncertainty while ensuring we align resources to priority growth areas, so that we are positioned to accelerate our edge-to-cloud strategy in a post-Covid-19 world.”
HPE is bringing in a 'cost optimisation and prioritisation plan' to re-focus investments and 'realign the workforce' to areas of growth.
This includes measures to simplify its product portfolio strategy, go-to-market configurations, supply chain structures, digital customer support model and marketing.
HPE expects that the plan will be implemented through to fiscal year 2022 and estimates that it will include gross savings of at least $1bn through changes to the company’s workforce, real estate model and business process improvements.
The plan is also expected to deliver annualised net run-rate savings of at least $800m by fiscal year 2022-end (when compared to 2019).