Layoffs in the tech sector are mounting with Hewlett Packard Enterprise (HPE) becoming the latest company to announce a big round of job cuts as part of a restructuring. After Meta Platforms (META) laid off 3,600 staff in a “low performance” culling spree, HPE said it will trim its workforce by around 2,500, or 5%.
HPE Cuts as Guidance Falters
The announcement came as the data center equipment maker issued full-year guidance that missed expectations, sending shares plummeting in Friday’s premarket session.
HPE forecast $0.28 to $0.34 in adjusted earnings per share for the Fiscal second quarter, with revenue seen between $7.2 billion and $7.6 billion. Analysts had been looking for $0.50 on $7.93 billion in revenue. For the 2025 fiscal year, HPE sees $1.70 to $1.90 in EPS against an expected $2.13.
But the company announced cost cutting program over the next 18 months that will lead to $350 million in savings by 2027.
Tech Layoffs Rise
It comes amid mounting jobs losses in the tech industry as it contends with soaring capex in artificial intelligence and uncertainty over trade and tariffs.
Computer and printer manufacturer HP (HPQ) said it is laying off between 1,000 and 2,000 workers, while semiconductor company Microchip (MCHP) said it will fire 2,000 staff. And in addition to META’s cull, last month Salesforce (CRM) announced plans to cut over 1,000 jobs.
Job losses are rising across the U.S., with the latest Challenger jobs report showing U.S. employers announced 172,017 layoffs for February, up 245% from January and the highest monthly amount since July 2020. More than one-third of the total came from Elon Musk’s DOGE cull of federal employees. However, the tech sector is also cutting numbers as companies seek to rein in costs.
Is HPE Stock a Buy?
The stock of HPE has a consensus Moderate Buy rating among nine Wall Street analysts. That rating is based on five Buy and four Hold recommendations issued in the last three months. The average HPE price target of $24.00 implies 33% upside from current levels. The numbers are likely to change after the company’s financial results.
