Hewlett Packard Enterprise unveils plans targeting gross savings of at least $1B by 2022, including layoffs and temporary pay cuts of 25% for top executives
Context & Ripple Effects
This is the third major restructuring wave inside the post-split HP family in four years. Hewlett Packard Enterprise itself had already begun cutting about 10% of staff via a planned 5,000-job reduction back in 2017, while sister company HP Inc. announced 7,000-9,000 position cuts just seven months before this announcement, ahead of its own CEO transition.
What is new here is the toolkit: alongside layoffs, HPE adds temporary 25% pay cuts for top executives — an unusual, visible concession aimed at protecting the savings target during the pandemic downturn. The corpus shows the pattern did not stop there: HP followed with a $1.4B annualized savings plan in 2022, and HPE was still trimming staff as recently as its March 2025 restructuring of ~2,500 roles despite growing revenue.
First-order effects
- Thousands of HPE employees face job losses on top of the ~10% workforce reduction begun in 2017, while the company's top executives absorb immediate 25% temporary pay cuts.
Second-order effects
- Recurring cuts compress HPE's cost base cumulatively — each program lands on an organization already thinned by prior rounds, raising execution risk for remaining staff even as the $1B gross savings target gives investors a concrete number to hold management to.
Third-order effects
- If the pattern holds — three-plus restructuring programs across HPE and HP Inc. since 2016 — multi-year layoff-and-savings cycles become standard operating rhythm for enterprise hardware firms rather than crisis responses, with executive pay cuts emerging as a symbolic lever layered onto headcount reductions.
The trend: Enterprise hardware companies are institutionalizing rolling multi-year cost-reduction programs, using layoffs as a standing management tool and adding executive pay cuts as a credibility signal during downturns.