HPE Lays Off Hundreds In North America, Doubles Down On ‘Partner-First’ Model

HPE Lays Off Hundreds In North America, Doubles Down On ‘Partner-First’ Model

The “Partner First” strategy – which brings North America into the channel distribution team – is structured to maintain closer alignment with partners in a simplified and more streamlined go-to-market model aimed at driving growth in the mid-market and SMB sectors.

This week, Hewlett Packard Enterprise has laid off hundreds of workers in North America as its “Partner-First” Go-to-Market model for the launch of the new fiscal year Nov. 1

The layoffs covered a wide variety of positions, including business partners, sales managers and direct sales staff, according to sources.

Blocks and Files — a storage-focused news site — was the first to announce the lay-offs. The site said 500 HPE workers had been let off the ground through a major sales reorganisation.

HPE may not have confirmed the layoffs.

In a statement to CRN, HPE said: “As we have previously reported, we are concentrating our investments and realigning our workforce to important core businesses and growth areas that will accelerate our plan. We are committed to making these required improvements with empathy and openness and to ensuring that the affected members of the team get the assistance they deserve. These acts will enable us to become a more agile organisation and advance our plan to deliver everything from edge to cloud, so that we can help our customers and partners transition to a new industry environment and use the strength of their data wherever they live.

The layoffs are coming in the middle of a major GreenLake cloud sales blitz, with HPE tripling its channel investment to accelerate large on-site GreenLake pay-per-use sales growth. Sources said the cuts was part of HPE ‘s expanded concentration on something as a service edge to the cloud platform-as-a-service sales strategy.

Sales blitz entails a major investment in new inside GreenLake sales reps charged with operating hand-in-hand with partners and an improved account coverage model for partners, all targeted at driving new logo wins.

The “Partner First” strategy – which brings North America into the channel sales team – is designed to maintain closer alignment with partners in a simplified and more streamlined go-to-market model aimed at driving growth in the mid-market and SMB sectors.

“We are opening up a lot more of our client base to the channel as we step into the next fiscal year,” said HPE GreenLake Cloud Services Company Group Managing Director Keith White to CRN last month. “We recognize that they have the tools, resources and capabilities to actually represent a much wider set of our client base. I expect these consumers to see a significant uptake in the ahead.”

Several channel reports called the latest North America “partner-first” model — which eliminates overlapping company partners and account managers — a rational expansion of the HPE Next initiative introduced in 2017, which resulted in a new internal compensation plan that lowered the number of HPE distribution plans from 400 to 25.

One of the top channel sales managers, who did not want to be identified, said the latest go-to-market model streamlines a model that had a lot of duplication between several product-focused account managers and even partner company managers. “There were just so many customers paying for an offer,” the executive said. “There were stock managers, generalists, several district managers. How do you retain that in a COVID-19 environment? You don’t do that.

The Executive said he saw the latest North America team headed by current Managing Director Paul Hunter and experienced channel leaders such as HPE Vice President and Managing Director Enterprise East Terry Richardson and HPE Vice President West and Central Peter Brennan doubling down the channel with a partner-first plan.

“The latest North American HPE team understands the importance of the channel,” he said. “People like Paul Hunter and Terry Richardson have DNA outlets. They appreciate the importance of the channel and the engineering talents we bring to the market. I see that HPE is more aggressively embracing the sales and engineering talents of the channel. Paul and the new team he’s bringing together are starting to get it.”

The executive, who interviewed some of the HPE workers who had been laid off for open positions in his own organization, said he believed that HPE will potentially have a stronger channel presence and go to market alignment in the new fiscal year.

“I think the improvements that HPE is making are going to make a difference,” he said. “I think they realise that in order to succeed, they need to exploit the engineering, solution architects, sales and marketing of the channel.”

North America’s cuts came five months after HPE announced the next chapter of its Next Transformation Plan, targeting gross savings of at least $ 1 billion by 2022.

At the HPE Securities Analysts Conference on Oct. 1, HPE CEO Antonio Neri told investors that HPE is making bold improvements to its business policy. “We are re-engineering our go-to-market approach to improve consumer engagement and accelerate our as-to-service mix and will bring improvements to these teams to provide a more seamless, holistic sales experience,” he added. “Our goal is to partner with consumers to help them achieve results that drive their individual, unique digital transformations.”

dNeri said that HPE is making “bold moves” in all of its business to “drive our agility, enhance our skills, simplify our processes and improve our execution.

Even as it cuts, HPE is investing heavily in training, enabling and selling resources for GreenLake, partners said.

“It’s all about GreenLake going forward. v From pre-sales to architect solutions to distribution, everything will be based on GreenLake, “said the sales executive for another partner who did not want to be identified. “If you don’t find a difference in the environment surrounding GreenLake, you’re not going to do well with HPE going forward.”

One channel source familiar with the cutbacks said that HPE is laser-focused on helping its partners and consumers adapt to a new business environment. “It’s just about letting customers use the strength of their data anywhere they are,” the source added.

A different channel source familiar with the HPE Go-to-Market plan suggested that the key would be if HPE would back up the channel push with a stern hand for direct reps that compete directly with the partners in the field.

“The trick to HPE is to have everyone in the field concentrated on building pipelines with partners,” the source said. “HPE also wants to make sure that the partner-first mandate is 100%.”