NO LOVE AT HEWLETT PACKARD ENTERPRISE

Am I Next? Layoffs at Hewlett Packard Enterprise

Published reports by reputable business publications such as Bloomberg News suggest that Hewlett Packard Enterprise is prepared to layoff up to ten-percent of its worldwide workforce, approximately 5,000 workers in the immediate future. This is part of HPE’s continuing realignment and restructuring to find relevance in today’s cloud environment and to compete with the other large players in the IT services space. Hewlett Packard Enterprise Company (HPE) was created on November 1, 2015 as part of splitting of the original Hewlett-Packard company. The company is headed by CEO Meg Whitman who still needs to prove to investors that HPE is a long-term play when measured against Microsoft, Amazon, Oracle, and others who are already in the cloud.   

 

A BROKEN TOY?

Am I Next? Toys R Us Bankruptcy

Although entering bankruptcy prior to the holiday season is not optimal, neither is a call on $400 million in maturing debt. Of course, bankruptcy is merely a tool to assist the company in renegotiating and restructuring debt as well as abandoning leases for unwanted brick-and-mortar stores. This debt apparently arises from the results of an older $6.6 billion buyout in 2005 when private equity investors like KKR, Bain Capital, Vornado Realty Trust, and others planned to reorganize the company for a future public offering. Unfortunately, 2008 happened with its mortgage meltdown and subsequent recession. Although the company has experienced ongoing net revenue losses, they still have operational liquidity and a large line of credit.

Competitively, consumers might regard Amazon, one of the chain’s major competitors, as a better deal for big-ticket toys that may require returns and/or refunds.

I would not be surprised to see mass layoffs and store closings in the future as the brick-and-mortar empire downsizes and gives way to the digital domain. Whether or not they can compete effectively with Amazon, Walmart, and Costco remains to be seen.

NO LOVE AT HARMAN PROFESSIONAL SOLUTIONS

Am I Next? Layoffs at Harman Professional Solutions

Harman Professional Solutions, the iconic manufacturer of professional audio, video, lighting and control systems, is now restructuring and consolidating after its purchase by Samsung in 2016. This will result in office closures and the layoff of approximately 650 employees.

Of course, David Glaubke, Harman’s Director of Public Relations, has put forth the happy management-speak spin.

  • “Still, I want to emphasize that decisions like this, while necessary, are not easy to make. We have given our employees advance notification of the changes we will make over the next year to assist with the transition and will do our best to mitigate the impact to our employees and their families.” 
  • “The changes we announced yesterday are the culmination of a transformation that the Professional Solutions division has been undergoing for the last two years to better serve our customers, increase our competitiveness and accelerate new product innovations.”
  • “We are now consolidating certain locations acquired through acquisitions over the years to leverage the R&D, engineering, design and manufacturing operations of our other divisions and speed up our time to market.” 
  • “We also are investing in a stronger IT infrastructure, supply chain and software-driven NPIs [new product introductions] that will improve high-demand product availability and processes and resources for our customers, sales teams and distributors.”
  • “Importantly, we also will ensure that the process is completely seamless for our customers. We are very excited about the future of Harman Professional Solutions and believe that, with these changes, we are now aligned and structured to serve our customers better and to return to stronger profitable growth.”

The original company was co-founded by two engineers, Sidney Harman and Bernie Kardon where Bernie was coincidently Sidney’s boss at his first job at the David Bogen Company. Another reason you may wish to treat your boss and co-workers with the utmost respect. Throughout his life, Harman was known for fostering a familial company culture. A lifelong supporter of charitable causes, Sidney was active in the management of the company’s affairs until he retired in 2006 at the age of 88. He passed away in 2011 at the age of 92.