Dive Brief:
- HPE announced plans to sell its Palo Alto, CA property on Thursday, reports Business Insider. Its new headquarters will be in Santa Clara, CA in a 23,0000-square foot facility originally built for Aruba, a company HPE acquired in 2015. There are approximately 45,000 international HPE employees, but it is unclear how many reside in Silicon Valley. Some employees will be moved to existing offices in San Jose and Milpitas, CA.
- HP has owned the Palo Alto property since 1957 and HPE worked in separate offices built onto the property in 1979. HP will remain in its portion of the Palo Alto property. The move is expected to be completed by the end of 2018, according to CRN.
- The move comes after its spin-merger of its Enterprise Services business moved 100,000 employees to DXC Technology in April, according to Forbes.
Dive Insight:
HPE and HP became separate entities in 2015 and HPE has since cut down on workforce and offerings. Its headquarter downsizing is a reflection of that. CEO Meg Whitman cut about 85,000 jobs since the split. This accounted for about a quarter of HP's entire workforce of 350,000.
To redirect its position in enterprise technology, HPE offloaded its custom-designed server business in October. After losing its "tier 1" client, reportedly Microsoft, the company found little gain in "custom-designed commodity server" since more companies are pushing for digital storage.
Businesses HPE relied on as customers are increasingly designing their own data centers, pushing HPE's primary product out of the way. However, the company's Q3 earnings finally showed improvement with a 3% year-over-year growth.
The improvement comes after a stream of acquisitions and the placement of new leadership, including president and CIO. Still, HPE continues to divest in technologies no longer serving its bottom line. and the decision to move headquarters is a reflection of Whitman's "slash and burn" policies.
