• HPE to cut 5% of workforce as margins bite
• Toshiba adds PQC to its quantum-safe networking platform
• GSMA boasts 109,000 attendees for MWC25

In today’s industry news roundup: About 2,500 jobs will be lost at Hewlett Packard Enterprise in the next 18 months as the vendor looks to cut costs; Toshiba has integrated post-quantum cryptography capabilities to its quantum-safe networking system; the halls of this year’s Mobile World Congress were graced by almost 110,000 attendees, according to the organiser; and much more!

Hewlett Packard Enterprise (HPE) is to reduce its headcount by about 5% over the next 12 to 18 months to cut costs as the vendor struggles with server business margins and operating losses in a move that will impact about 2,500 employees. The news came as CEO Antonio Neri provided comments on the company’s fiscal first quarter and the ongoing saga of its planned acquisition of Juniper Networks. HPE reported revenues for the three months to 31 January 2025 of $7.9bn, up 16% year on year, and an operating profit of $780m, up by 1% and much lower than expected. “We delivered against our commitments for the quarter including achieving strong double-digit year-over-year revenue growth. However, we could have executed better,” noted Neri during the company’s earnings conference call. “While our Q1 operating profit outlook anticipated increased pressure on our server operating margins, three factors impacted our profitability more than expected. Near the end of the quarter, we saw that our traditional server pricing did not adequately account for the evaluation of our inventory, which resulted in incremental server margin pressure. Higher discounts due to aggressive pricing competition in the market compounded this issue. And finally, our server margins were further pressured by the higher-than-normal AI inventory caused by the rapid transition of demand [for] next-generation GPUs and related components. We have already implemented aggressive actions to address these issues and are already seeing the positive effects of doing so. However, we do expect to see continued pressure over the next one to two quarters before we realise the full benefit of these measures, including expected higher AI revenue conversion,” added the CEO. As a result of the weaker-than-expected results, HPE plans to “reduce our employee base 5% over the next 12 months to 18 months through the reduction of approximately 2,500 positions and expected attrition. Doing so will better align our cost structure to our business mix and long-term strategy,” stated the CEO. Investors took fright and the company’s share price dropped by more than 15% in early trading on Friday to $15.10. Neri also provided an update on the planned $14bn acquisition of Juniper, which the US Department of Justice (DoJ) is attempting to block. “The DoJ’s analysis of the market is fundamentally flawed. We strongly believe this transaction will positively change the dynamics in the networking market by enhancing competition. HPE and Juniper remain fully committed to the transaction, which we expect will deliver at least $450m in gross annual run rate synergies to shareholders within three years of the deal closing. The court has set a trial date of 9 July. We believe we have a compelling case and expect to be able to close the transaction before the end of fiscal 2025,” stated the CEO. 

Toshiba Europe says its commercially available quantum key distribution (QKD) systems “now natively incorporate the latest post-quantum cryptography (PQC) standard, bringing an additional layer of security to its quantum-safe networking platform.” QKD and PQC are the two main methods that have been developed to protect against future quantum-based attacks, noted the company in an announcement shared with the media. “QKD and PQC each have respective benefits and trade-offs in terms of hardware-based absolute security and software-based scalability. A combination of PQC and QKD can utilise the benefits of both methods, providing crypto-agility and ensuring ‘defence in depth’ for users,” added the vendor, which has been working for years on quantum-safe networking with UK national operator BT. “Organisations need to take action now to protect their communications against quantum computing-based attacks, and this enhancement to our QKD systems makes doing so much easier,” stated Andrew Shields, head of the Toshiba Quantum Technology Division. “Natively supporting the deployment of PQC algorithms within our QKD systems is a huge step forwards in giving our customers the flexibility and agility to adopt the right quantum-safe strategy for their organisation while also allowing for further futureproofing as quantum threats evolve,” he added. For more on PQC and QKD, see this article about the first three encryption algorithms issued by the US Department of Commerce’s National Institute of Standards and Technology (NIST).

Industry body the GSMA says its flagship Barcelona-based annual event, Mobile World Congress, attracted 109,000 attendees this year. The show, which ended on Thursday 6 March, boasted more than 2,900 exhibitors, some of which had fantastic coffee (hat tip here to Juniper Networks and Totogi). TelecomTV was at MWC25, of course, and you can watch all of the editions of The Slice, the programme recorded each day of the show, as well as dozens of interviews and discussions, in the Spotlight on 5G section of the site. 

Chip giant Broadcom reported record revenues of $14.9bn, up by 25% year on year and adjusted EBITDA of $10bn, up more than 40%, for its fiscal first quarter that ended 2 February and, whaddaya know, the numbers were thanks, in part, to the artificial intelligence boom. “Broadcom’s record first-quarter revenue and adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) were driven by both AI semiconductor solutions and infrastructure software,” noted Broadcom president and CEO Hock Tan. “Q1 AI revenue grew 77% year-over-year to $4.1bn and infrastructure software revenue grew 47% year-over-year to $6.7bn. We expect continued strength in AI semiconductor revenue of $4.4bn in Q2, as hyperscale partners continue to invest in AI XPUs and connectivity solutions for AI datacentres,” he added. The news helped the company’s share price rise by more than 7% to $192.62 in early trading on Friday. 

– The staff, TelecomTV