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HPE to staff: 'We are permanently clipping your costs'

'Tightened' travel, meals, catering policies the new norm

By Paul Kunert, 8 Jun 2017

A six-month squeeze on staff travel expenses and meal allowances are among the measures Hewlett Packard Enterprise is using to lop up to $300m off its operating costs.

Nick Gunn, senior veep of global corporate services, said in an internal memo that HPE needed to "drive efficiencies" in spending and was immediately "implementing a number of company-wide actions" to do this.

"We are permanently tightening and enforcing our travel and meetings policies. Please familiarise yourself with the policy requirements, including changes to travel approvals, meals and catering," he said.

A shiny new "travel pre-approval process and tool" has been launched, Gunn said, and he warned that "only critical non-customers related travel" will be approved by Line 2 managers for domestic trips, and by Line 1 bosses for international visits.

"As a company, we continually look at ways to drive efficiencies in our spend and our investments. Each of us needs to play a role by spending HPE's money like it's our own," he said.

Things aren't quite going to plan for the shape-shifting HPE, which has already split from the divisions that sold computers, printing, and outsourcing services, and is about to offload the software business.

In recently released first-half numbers for HPE's fiscal 2017 ended 30 April, like-for-like sales declined 11.7 cent year-on-year to $15bn and operating profit was down 18.9 per cent to $1.76bn.

Product margins reduced due to rising component prices, stiff competition, and stranded overheads from the sale of Enterprise Services, the company said. As a result, HPE said it wanted to cut between $200m to $300m by the end of this financial year at the close of October.

Tim Stonesifer, CFO at HPE, said on a conference call that "roughly half" of the cost savings will come from "discretionary type stuff like policies, like travel and then the other hand is labour related".

In the headcount reduction, "half of that is really around lowering our rehire rates, taking a look at contractors... then there's the remaining 25 per cent that would be more structural and that's why we are evaluating the restructuring that we have in 2018 employing forward."

HPE is just one of a long list of born-in-the-20th-century tech businesses that have been screwed by the cloud, and it isn't alone in clipping expenses from the general workforce: IBM and DXC Technology, for example, have pulled the same strings this year. ®

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