Data center News
HPE North America Layoffs, New Hires Come As Part Of ‘Specialty-Led Hunting’ Transformation
HPE is implementing a new ‘specialty-led hunting’ go-to-market model that includes the hiring of new sales specialists even as it eliminates a number of general sales roles in North America, including some territory account managers, enterprise account managers and partner business managers.
Hewlett Packard Enterprise’s North America sales team has been hit by layoffs even as the company plans to hire new sales specialists as part of a stepped-up focus to drive core market-share gains in compute, storage and even high-performance compute/artificial intelligence.
Sources told CRN that the company has eliminated a number of general sales roles in North America—including some territory account managers, enterprise account managers and partner business managers—as part of a doubling down on sales specialists who are charged with driving share gains in storage, compute and hybrid cloud.
HPE Chief Sales Officer Heiko Meyer, who oversees the worldwide sales force, said the new structure comes as HPE is ready to gain share now that the post-pandemic supply chain challenges are over.
“We want to grow the core and gain market share,” said Meyer, disussing the new go-to-market model. “This means we are investing in specialty-led hunting, aligning with the most relevant opportunities and requirements around compute, HPC/AI and the hybrid cloud business. This means we want to take share, and share comes through hunting, and hunting comes through specialization.”
A year ago, Meyer said, the industrywide supply chain shortage impacted HPE’s ability to grow that core business. “We could not grow in the core business because there was no supply available,” he said. “Supply is available now. We want to take share. We want to grow.”
Meyer would not discuss the specifics of the layoffs or the new hires in North America but pledged that partners will see more “feet on the street” and resources to close deals. “Partners will see on the one side more resources from us and on the other side they will see us much more aggressive competing in the market,” he said.
The bottom line, said Meyer, is that HPE wants “to add net-new logos with and through our partners.”
The CEO of a top regional partner, who did not want to be identified, said that even though the cuts are significant it ultimately could be a net positive for partners, who are HPE’s top resource to maintain the general account relationships with customers.
“HPE is supporting partners by shifting resources and focus from general account management to specialists where solution providers need to compete on storage, compute and as a service,” said the CEO. “This is going to make HPE more partner-friendly. It is addressing where partners need more help in the sales trenches with storage, compute and as a service. HPE is diverting resources to where partners need more help.”
A top executive at a national HPE partner, who did not want to be identified, said the layoffs are widespread and are part of a no-holds-barred drive to double down on product-oriented sales specialists who can team with partners to drive storage, compute and hybrid cloud sales gains.
The top executive said generalist account managers in the commercial group were heavily impacted by the cuts. He expects hundreds of new specialists in the storage business and an aggressive new compute specialist sales team to assist partners in closing deals.
HPE is also eliminating some of the generalist partner business managers in favor of more product specialist-focused partner business managers, said the top executive. “HPE wants more specialist resources for partners in compute, storage and GreenLake,” he said. “These are partner-facing specialty resources. They want more focus on the products. This is a move to drive market share in compute and storage.”
The top executive said the restructuring depends heavily on aggressively engaging with channel partners to drive compute, storage and GreenLake as-a-service share gains. “This is a move from an account-focused model to competing more with pure-play technology companies,” said the executive. “The only way this works is if HPE relies on the channel more. The channel has the long-standing account relationships.”
The CEO for a top MSP called the cuts “pretty drastic.” He said his partner business manager was laid off on Tuesday morning, and he has already offered the longtime executive a job at his company. “I don’t have a position for him, but I already made him a job offer,” he said. “He knows the accounts and the partner playbook. HPE is getting rid of a lot of generalist partner business managers.”
The CEO of a top regional HPE partner said the cuts in one region include as many as 50 percent or more of general account managers and enterprise account managers, who will be replaced with specialty sales resources. “My teams knows as many as 30 people that have been let go,” said the CEO, speaking on condition of anonymity. “This is a very, very deep cut.”
Eric Powers, a manager of the HPE practice at CDW, the $23.74 billion solution provider powerhouse, No. 4 on the 2023 CRN Solution Provider 500, in a LinkedIn post offered to help HPE employees hit by the layoffs.
“To all of my Hewlett Packard Enterprise friends who were caught up in the workforce reductions yesterday, my heart and prayers are with you and your families,” wrote Powers, a former HPE channel solution architect who joined CDW in 2018. “If you are now looking elsewhere, consider giving CDW a look. One of the best moves I have ever made. If you loved the amazing culture, family atmosphere and career opportunities of HPE, CDW is then the place for you. Very similar and fun to work for!”
The changes come as HPE is implementing a new organizational structure that will go into effect at the start of the company’s new fiscal year on Nov. 1. The new HPE operating model includes a new hybrid cloud business unit that now includes the storage business.
“Having laid the foundation for success, we are now evolving our operating model to accelerate our execution, deliver a superior customer and partner experience, and drive growth for the company and value for our shareholders,” said HPE CEO Antonio Neri in a blog post on Sept. 19 announcing a news sales structure that aligns business segment financial reporting with the new business structure. “These changes to HPE’s organizational structure and executive leadership, which take effect at the start of our 2024 fiscal year on November 1, 2023, will further unify our portfolio and enhance the delivery of a true cloud experience for our customers and partners. They will enable tighter integrations that benefit our customers and partners and spark innovation. And, they position us to continue to win in the market.”
Neri is set to address analysts Thursday at the annual HPE Securities Analyst meeting.
C.R. Howdyshell, CEO of Advizex, a Fulcrum IT Partners company and one of HPE’s top partners, said he sees the changes as an opportunity for partners to drive channel sales growth.
“One thing we have learned in the channel working with OEMs is it is always going to be a constant state of change,” he said. “But usually times like this result in opportunities and benefits for the channel. I see this as a positive opportunity for partners that are willing to step up and make the commitment. Advizex has invested heavily, and we continue to invest in what the OEMs are bringing to the table. We are looking forward to engaging with the HPE specialist organization on the new go-to-market model.”
Rob Schaeffer, president and COO of CBT, Orange, Calif., a top HPE enterprise partner that specializes in IoT, data and information, and artificial intelligence, machine learning and deep learning, said he was sorry to see so many talented HPE employees being laid off.
“This is hard for all of us as partners and [for me] as an alumni of HPE,” said Schaeffer, a former seven-year HPE veteran who was vice president of U.S. channels at HPE until he moved to CBT in 2020. “The constant change is painful because it affects so many people that are near and dear to our heart. [Neri] has a responsibility to run the business and produce for shareholders, employees, customers and partners. It is a very tough balancing act. But the constant change is hard for all of us. The silver lining is we are hearing that this is good for the partners.”
Schaeffer said he is looking forward to seeing actions that back up the claims that the changes will be good for partners. “I have heard that a lot over the decades I have been associated with HPE,” he said. “I would really like to see that come to fruition.”
Schaeffer said he remains optimistic about the new opportunities emerging around AI despite the many layoffs in the tech industry this year.
“The whole world of artificial intelligence and deep learning and machine learning is going to buoy our industry like never before,” he said. “The industry is in a great place, but yet a lot of the tech companies have had significant layoffs in 2023 because of the macroeconomic conditions.”
Schaeffer said the need for a “close partnership” with solution providers in a true co-selling model is an “absolute necessity” in the market today. “If you want to stop cutting and start hiring, you need to attract new clients with new solutions and technology that deliver results,” he said. “The future looks bright from a technology perspective. We are hoping and praying to do our best with the current macroeconomic conditions. There are hundreds of thousands of people that lost their jobs in technology this year. They will land on their feet as companies realize they need employees to carry the load to match customer requirements with great technology that is here today.”
Ultimately, Schaeffer said he sees bright days ahead for companies like CBT that are providing highly specialized business solutions. “Today is the era of specialization,” he said. “This is all about working with partners that are already specialists in unique areas of technology that can build what our customers want in an aggregated solution. This all comes down to working together and getting things done. Let’s stop talking and start working together in the right way.”