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HPE Forecasts Below-Estimate Revenue Amid Tariff Impact and Cost-Cutting Measures

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Hewlett Packard Enterprise (HPE) has projected quarterly revenue growth below analysts’ estimates, resulting in a nearly 20% drop in its shares in after-hours trading. The company attributed this forecast to the uncertainty created by the U.S. tariff war, which has affected its server business.

CEO Antonio Neri addressed the issue on a post-earnings call, explaining that HPE plans to adjust the prices of its products and leverage its global supply chain to mitigate the impact of both imposed and threatened tariffs. Neri added that the forecast reflects the company’s best estimate of the net effects of U.S. tariff policy.

U.S. President Donald Trump recently exempted certain goods from Canada and Mexico under a North American trade pact until April 2, temporarily easing some tariffs. However, Trump’s additional 10% duty on Chinese goods, which follows a 10% tariff imposed earlier in February, took effect this week, adding more pressure on companies like HPE.

Sales outside the U.S. account for nearly 64% of HPE’s net revenue in fiscal 2024, with key operations, including production and final assembly, based in Mexico and China. CFO Marie Myers stated that the company expects to mitigate much of the tariff impact during the second half of the year, although some effects may be felt in the second quarter as mitigation measures are gradually implemented.

HPE’s second-quarter revenue forecast falls between $7.2 billion and $7.6 billion, which is below the analysts’ expected $7.93 billion. The company’s profit forecast also missed expectations. In a bid to cut costs, HPE announced plans to lay off 5% of its global workforce, equating to approximately 2,500 jobs. These layoffs are part of a cost-saving program expected to generate about $350 million in savings by fiscal 2027. HPE had around 61,000 employees as of October 31.

Despite these challenges, the company reported first-quarter revenue of $7.85 billion, slightly surpassing analysts’ estimates of $7.82 billion. Server revenue grew by 29%, reaching $4.3 billion.

Meta Set to Announce Layoffs on Monday, Internal Memo Circulated

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Meta Platforms, the parent company of Facebook, has confirmed plans to carry out company-wide layoffs next week, as revealed in internal memos shared with staff on Friday. The company is expected to send notifications to employees affected by the layoffs starting at 5 a.m. local time on Monday in various countries, including the United States. Meta has made it clear that these cuts are part of a broader strategy to trim down its workforce, focusing particularly on “low performers,” a move previously announced by the company. Alongside these layoffs, Meta is accelerating its recruitment of machine learning engineers, indicating a shift towards prioritizing AI expertise.

According to the memo from Meta’s Head of People, Janelle Gale, employees in certain countries, including Germany, France, Italy, and the Netherlands, will not be impacted by the layoffs due to local labor regulations. However, employees in other regions, including parts of Europe, Asia, and Africa, will receive their notifications between February 11 and February 18. The company’s decision to proceed with layoffs in these countries while maintaining operations in others highlights the complexities of managing a global workforce under varying legal constraints.

The layoffs will affect approximately five percent of Meta’s employees, particularly those deemed as “lowest performers.” Despite the cuts, Meta has committed to backfilling some of the positions, although specific details regarding the number of roles being reinstated or the timeline for these rehiring efforts remain unclear. The announcement comes as Meta continues to refocus its priorities, with machine learning and AI emerging as key areas of investment for the company moving forward.

In a departure from previous mass layoffs, Meta will not be shutting down its offices on Monday and will not issue further updates about the terminations, according to Gale’s memo. This approach signals a more structured, perhaps less disruptive method of handling the cuts, as Meta seeks to navigate its workforce changes while continuing its operations. The company’s decision to keep the offices open suggests a desire to maintain normalcy during the announcement, despite the ongoing restructuring process.

to Implement Layoffs While Expediting AI Engineer Hiring

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Meta Platforms, the parent company of Facebook, is preparing for company-wide layoffs next Monday, as indicated in internal memos reviewed by Reuters. The layoffs, affecting around 5% of employees deemed “lowest performers,” will begin at 5 a.m. local time in many regions, including the U.S. However, workers in Germany, France, Italy, and the Netherlands will be exempt from the cuts due to local regulations. Notifications for employees in other countries, including those across Europe, Asia, and Africa, will be issued between February 11 and February 18.

Meta has confirmed that it intends to backfill some of the positions lost during the layoffs, particularly in critical areas such as machine learning engineering. This push for hiring new talent aligns with Meta’s 2025 priorities. Despite the layoffs, Meta plans to keep its offices open on Monday, without issuing further updates on the decisions, according to a memo from Head of People, Janelle Gale.

The expedited hiring process for machine learning engineers and other vital roles will take place between February 11 and March 13. VP of Engineering for Monetization Peng Fan emphasized the importance of staff support in meeting these hiring goals.