HPE is grappling with significant challenges in its server division, mirroring issues faced by Dell, as server sales falter due to customer delays linked to Nvidia's Blackwell GPUs. Operating margins have dropped to 8.1%, prompting HPE to announce layoffs of 2,500 employees over the next 12 to 18 months. These layoffs accompany aggressive cost-cutting strategies, including reduced recruiting and discretionary spending. The company anticipates only modest growth, with operating margins remaining under pressure, particularly in AI server sales, as it seeks to realign its cost structure with market expectations.
HPE's operating profit margin fell to 8.1% amid declining server sales as requests for Nvidia's Blackwell GPUs grow, necessitating 2,500 layoffs to reduce costs.
HPE is pursuing aggressive cost-cutting by reducing its workforce and spending amid an anticipated declining revenue in its server division during the fiscal year 2025.
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