HPE Reportedly Set To Cut 10 Percent Of Workforce, Channel Veterans Impacted By Restructuring

Hewlett Packard Enterprise is planning to cut 5,000 jobs or 10 percent of its workforce, as part of its HPE Next restructuring initiative, according to reports from Bloomberg and The Wall Street Journal.

HPE has already begun notifying executives impacted by the restructuring, with the company announcing this week the new management teams within each of the 11 geographies, sources told CRN.

HPE did not respond to a request for comment as of press time.

[Related: HPE Global Channel Chief Samuels On Removing Layers, Making Decisions Faster, Synergy's Impact On VMware, And Why Competitors Are 'Scared' Of HPE]

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The HPE Next initiative is aimed at rearchitecting and simplifying the structure of the company with as much as $200 million to $300 million in cost savings in the current fiscal year. HPE is aiming for $1.5 billion in cost savings over a three-year period.

In a note to employees Friday, HPE CEO Meg Whitman said the media reports speculating about employee reductions did not come from information released by the company.

"As you know, we have been aggressively moving forward with our HPE Next program, which is focused on positioning the company for the future. And, I can assure you that our employees are the heart of that strategy. We are looking at a variety of options as we think about the cost structure of the company, and they include both reductions and investments," Whitman said in the memo.

Furthermore, Whitman said it is critical for the company to put "the right resources behind areas that will drive our profitable growth, while rebalancing our cost structure in others."

Finally, Whitman said HPE is committed to "transparency" and will communicate decisions as soon as they are made.

As part of the Next restructuring, HPE has already announced that it is flattening its channel organization eliminating layers of management by combining its channels and alliances groups under a single organization headed by Global Channel Chief Denzil Samuels.

The restructuring also includes a new North America management team led by North America Sales Chief Dan Belanger, CRN reported Friday.

Among the top channel executives leaving HPE as a result of the restructuring are Scott Dunsire, an 11-year HPE veteran widely credited with making broad channel improvements and improving co-selling engagement between partners and the HPE direct sales force and Mike Parrottino, a 30-year HPE veteran who was a passionate advocate for partners and the SMB route to market.

Both Dunsire and Parrottino dramatically increased the percentage of sales going through the channel, initiating a mandate to drive 100 percent of SMB sales through partners.

Dunsire and Parrottino will work on the channel transition through the end of the HPE fiscal year, Oct. 31, sources said.

Rick Chernick, the CEO of Camera Corner Connecting Point, Green Bay, Wisc., said both Dunsire and Parrottino are outstanding executives who will quickly land at other companies.

"HPE has lost some good people here," said Chernick. "The understanding these guys have of the reseller channel is worth a fortune. Some company is going to pick up them up and add some unbelievably talented employees to their team. Dunsire and Parrottino are two of the best. They are going to land on their feet.

Chernick, who serves as a board member for the NFL's Green Bay Packers, said he sees the Dunsire and Parrottino as two free agents that are going to be picked up quickly. "This is like having Aaron Rodgers and Brett Favre available," he said. "I wish had room in my salary cap for them."