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HP To Implement Major Cost Cuts, Reduces CEO Pay by 25% Due to Covid-19 Crisis

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HP also decided to cut by 25% the portion of the annual $100,000 cash retainer entitled by directors for the same period

  • Reuters
  • Last Updated: May 22, 2020, 2:44 PM IST
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Hewlett Packard Enterprise on Thursday unveiled a plan targeting gross savings of at least $1 billion (817.5 million pounds) by 2022 and cut the base salaries of top executives by 25% as the software maker seeks to weather the coronavirus crisis. Shares, down about 35% this year, fell nearly 6% in extended trading after the company missed second-quarter revenue and profit estimates, hit by global lockdowns since February.

Chief Executive Officer Antonio Neri flagged concerns about cautious consumers and supply constraints during a post-earnings call. Beginning July 1, through the remainder of the fiscal year 2020, the base salaries of the CEO and officers at the executive vice president level will be reduced by 25%, HPE said.

The board also agreed to cut by 25% the portion of the annual $100,000 cash retainer entitled by directors for the same period. HPE will now focus on investments and realign its workforce to evolve with its supply chain and real estate strategies, as well as right-size the business.

“My expectation is at least 50% of our employees will never come back to an office,” Neri said on the call. HP, which in April withdrew its 2020 forecast, posted second-quarter adjusted earnings of 22 cents per share, missing the average analyst estimate of 29 cents, according to IBES data from Refinitiv. Revenue of $6.01 billion also missed an estimate of $6.29 billion.


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