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title: Hewlett Packard Enterprise Faces Significant Stock Decline Amid Weak Profit Outlook and Job Cuts

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# Hewlett Packard Enterprise Faces Significant Stock Decline Amid Weak Profit Outlook and Job Cuts
Hewlett Packard Enterprise (HPE) recently experienced a substantial stock decline, marking its most significant drop since 2020. The company's shares plummeted by approximately 16% following the announcement of a weaker-than-expected profit outlook and plans to reduce its workforce by about 3,000 positions. 
BUSINESSTIMES.COM.SG

In its latest financial disclosures, HPE projected adjusted earnings per share (EPS) for the current fiscal year to be between $1.70 and $1.90, falling short of analysts' expectations, which averaged around $2.12. The company also anticipates second-quarter revenue to range from $7.2 billion to $7.6 billion, below the consensus estimate of $7.94 billion. 
LIVEMINT
 This subdued forecast is attributed to several challenges, including pricing pressures in its traditional server business, higher-than-expected inventories in the AI-server segment due to transitions to Nvidia's new Blackwell platform, and anticipated impacts from global tariffs. 
MORNINGSTAR

To address these issues, HPE has initiated a cost-cutting program that includes reducing its global workforce by approximately 5%, equating to about 2,500 job cuts over the next 12 to 18 months. 
MORNINGSTAR
 This restructuring aims to achieve annual savings of around $350 million by fiscal year 2027. 
CHRON.COM
 The company expects to incur charges related to these layoffs in both its fiscal second quarter and the full year 2025.

The announcement of these measures led to a sharp decline in HPE's stock, with shares dropping as much as 16% after markets opened in New York, marking the most significant intraday decline since March 2020. 

 This downturn reflects investor concerns over the company's ability to navigate the current challenges and achieve its revised financial targets.

HPE's leadership acknowledges the need for improved execution, particularly in its server unit, which has faced issues such as discounting during sales and higher-than-expected costs. The company is also contending with a buildup of older-generation semiconductors, further impacting profit margins. Despite these hurdles, HPE remains committed to addressing these challenges and is implementing strategies to enhance operational efficiency and financial performance.
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