HPE's Azure Stack Hub future 'in doubt' as US staff canned, SimpliVity team cut, India picks up the pieces

Current and former bods fear cloud work is doomed, IT titan disagrees

Over the past two weeks, Hewlett-Packard Enterprise has axed roughly 150 positions in the US, including Azure Stack Hub engineering roles and at least part of its SimpliVity team.

An individual with knowledge of the situation told The Register that HPE axed eight of its US employees working on the Azure Stack Hub project on July 17, 2020, leaving a single manager in place. Microsoft's Azure Stack Hub is a way to run apps on-premises in conjunction with the Windows giant's Azure cloud services. HPE sells a hybrid cloud product called HPE ProLiant for Microsoft Azure Stack Hub.

The only people at HPE now working on Azure Stack Hub, we're told, are based in India, where the focus is QA testing rather than product development. Our source told us that without the US team focused on R&D, HPE will no longer be able to add support for new platforms to Azure Stack Hub.

If that's correct, the changes have the potential to delay or end efforts to bring Aruba switches, Synergy enclosures, Edgeline servers, and SN2010M switches to Microsoft's hub. From what we've learned, those were projects being worked on by HPE developers in America.

The job cuts could also affect HPE's ability to deliver a trial scheduled with the US National Oceanic and Atmospheric Administration (NOAA) involving Edgeline EL8000 with SN2010M switches and Azure Stack Hub. The Azure Hub Stack workforce reduction may have other knock-on effects. Our source speculated it will become almost impossible to implement bug fixes because US software engineers wrote the code to address technical escalations.

We're told that both the axed US staff and support personnel in India – HPE PointNext – believe the job cuts have doomed the project. HPE, however, does not share that view.

We also understand that Microsoft has been told of the Azure Stack Hub cuts. We asked Microsoft to comment, and its spinners declined. We've been told that Microsoft purchased about $500,000 worth of equipment that it had expected to use to help HPE with R&D.

HPE declined to comment on specific customer engagements but disputed the notion that its team in India is incapable of developing and supporting Azure Hub Stack.

In an emailed statement, an HPE spokesperson said, "We continue to drive support and R&D for HPE ProLiant for Azure Stack Hub with a talented team in the US and India, and we shift projects and resources between these locations regularly." HPE declined to confirm the specific layoff figure we heard for Azure Stack Hub, allowing only that it's a very small number.

Another source familiar with HPE told us that approximately 200 people were laid-off from the US team working on HPE SimpliVity, a hyperconverged infrastructure offering that combines and virtualizes storage, compute, networking, and management.

Earlier this month, our sister publication Blocks & Files reported that HPE planned to eliminate an undisclosed number of positions as part of a restructuring effort to unify the SimpliVity and Nimble disaggregated hyperconverged infrastructure (dHCI) R&D teams.

The SimpliVity team workers who lost their jobs were mostly in HPE's Westborough, Massachusetts, office and its Fort Collins, Colorado, office. Their last day, we're told, was July 24, 2020.

According to a recent Massachusetts Worker Adjustment and Retraining Act (WARN) report, HPE said it is laying off 146 people in Westborough from July 24, 2020 through July 31, 2020. That doesn't count HPE workers in Colorado who lost their jobs. The latest WARN notice from Colorado doesn't mention HPE, suggesting that layoffs there, if any, fall below the statutory reporting threshold.

However, a person familiar with the Westoborough layoffs claimed the enterprise giant was able to "transition a significant number of those team members, so they were never actually terminated."

'Optimize'

Asked to confirm a report in DigiTimes that HPE plans to move its server R&D efforts to Taiwan and reduce R&D resources in Houston, Texas, HPE's spokespeople said: "Our server R&D organization remains based out of the US, Taiwan and India – as it has for over a decade. We regularly optimize resources across locations depending on priorities and continue to maintain a larger server research operation in Houston."

In 2017, HPE, which employs about 61,000 people globally, embarked on a more significant restructuring effort that dispensed with about 5,000 employees, a reduction in headcount that proved pleasing to shareholders. ®