Overview

• Hewlett Packard Enterprise (HPE) announced a workforce reduction plan affecting 2,500 employees, representing 5% of its global workforce, over the next 18 months.
• The company reported a 16% year-over-year revenue increase to $7.85 billion for Q1 2025 but issued revenue and earnings guidance below analyst expectations for the upcoming quarter and fiscal year.
• HPE attributed its lower profit margins to increased inventory costs, aggressive discounting, and the impact of new U.S. tariffs on imports from Canada, Mexico, and China.
• The company’s stock dropped nearly 20% after the announcement, marking its lowest level in over a year, as investors reacted to weak guidance and ongoing challenges in the AI server market.
• HPE is also preparing for a legal battle with the Department of Justice over its proposed $14 billion acquisition of Juniper Networks, with a trial set for July 2025.