HPE Next

6 Months Ended

Apr. 30, 2020

Restructuring and Related Activities [Abstract]

The Company extended the HPE Next initiative to fiscal year 2021 in order to mitigate recent global developments and the evolving economic uncertainty. With this extension, the Company expects to incur expenses related to streamlining, upgrading and simplifying back-end operations as it implements further cost take-out actions designed to deliver incremental savings. These costs are expected to be partially offset by gains from real estate sales.

Transformation Costs

During the three and six months ended April 30, 2020, the Company incurred $200 million and $289 million of net charges which were recorded within Transformation costs in the Condensed Consolidated Statements of Earnings. During the three and six months ended April 30, 2019, the Company incurred $55 million and $138 million of net charges, of which $54 million and $132 million were recorded within Transformation costs, and $1 million and $6 million were recorded within Non-service net periodic benefit credit, in the Condensed Consolidated Statements of Earnings, respectively.


	Three months ended April 30,						Six months ended April 30,
	2020		2019		2020		2019
	In millions
Program management⁽¹⁾	$	7	$	9	$	18	$	20
IT costs	18		26		46		53
Restructuring charges	164		18		248		51
Loss (gain) on real estate sales	4		(7)		(37)		(7)

Other	7		9		14		21
Total	$	200	$	55	$	289	$	138

(1)Primarily consists of consulting fees and other direct costs attributable to the design and implementation of the HPE Next initiative.

Restructuring Plan

On October 16, 2017, the Company's Board of Directors approved a restructuring plan in connection with the HPE Next initiative (the "HPE Next Plan") and on September 20, 2018, the Company's Board of Directors approved a revision to that restructuring plan. As a result of the revision to the plan, cost amounts and total headcount exits were revised and the completion of the workforce reductions was extended to fiscal year 2020. The changes to the workforce will vary by country, based on business needs, local legal requirements and consultations with employee work councils and other employee representatives, as appropriate.