There are some simple financial and market forces at play here.
Firstly, when a company stagnates that is the size of HPE and hits the skid pan with flatline revenue, margins are on downward spiral and there is no line of sight to become the low cost producer, significantly differentiated or a niche player there is only one thing left you can attack - the cost base.
HPEs costs will be dominated by headcount, R&D and channel programmes/development. Axing R&D or channel dev would be perceived as commercial suicide - and the analysts who provide insight to major stock investors making positional decisions of HPE stock will start marking the future financial potential heavily down, the share price free falls and rightly so top management will be ousted as hostile takeovers start to be mooted to asset strip the company. No one in their right mind would buy HPE in ts current state other than to break it up into parcels for sale.
So back to cost - if that’s your only lever to improved profitability and desperately needed competitiveness - you cut heads, take the onetime restructuring cost and sweat the hell out of your remaining assets and do all you can to make your channel stronger will great new products that can sell like hot cakes, beautifully funded by the smart R&D investment decisions and execution.
HPE is at a tipping point - and fighting for its very survival as we right size for the nth time. Drastic times require even more drastic, riskier actions. So will there be a huge downsize through WFR?there are no other viable options on the table. The numbers just don't lie.
Employees who are expensive to keep (long tenure, high salaries/benefits, or those who are cheap to dispose of (low tenure) coupled with those in jobs in the field that have little if any accountability for what is important TODAY are the top targets for departure.
The HPE Next (WFR) initiative is being run by Faust in finance and will be heavily driven by Excel spreadsheets. There will be blood spilt - and a lot of it. Whitman will be supporting this fully to drive it through as her reputation is on the line and she will jump while she can still claim she inherited a disaster and left with the restructuring well advanced.
Hence her and other officers disposing of BIG chunks of stock – no staff are in a better position to understand what the future likely holds than a Company Officer and of course it is just sensible to cash out before you crash out.
If she doesn’t commit and support a savage downsizing, the chance of her next, major league CEO position in Corporate America and her political ambitions, are toast. She will become radioactive.