Transformation Programs

12 Months Ended

Oct. 31, 2023

Restructuring and Related Activities [Abstract]

Transformation programs are comprised of the Cost Optimization and Prioritization Plan and the HPE Next Plan. During the third quarter of fiscal 2020, the Company launched the Cost Optimization and Prioritization Plan which focuses on realigning the workforce to areas of growth, a new hybrid workforce model called Edge-to-Office, real estate strategies and simplifying and evolving our product portfolio strategy. The transformation costs predominantly related to labor restructuring, non-labor restructuring, IT investments, design and execution charges and real estate initiatives. The primary elements of the Cost Optimization and Prioritization Plan have been substantially completed by the end of fiscal 2023.

During the third quarter of fiscal 2017, the Company launched the HPE Next Plan to put in place a purpose-built company designed to compete and win in the markets where it participates. Through this program, the Company is simplifying the operating model, and streamlining its offerings, business processes and business systems to improve its strategy execution. The primary elements of the HPE Next Plan have been substantially completed by the end of fiscal 2023.

Cost Optimization and Prioritization Plan

The components of the transformation costs relating to the Cost Optimization and Prioritization Plan were as follows:


	For the fiscal years ended October 31,
	2023		2022		2021
	In millions
Program management	$	9	$	27	$	83
IT costs	26		26		14
Restructuring charges	226		201		598

Total	$	261	$	254	$	695

HPE Next Plan

The components of transformation costs relating to HPE Next Plan were as follows:


	For the fiscal years ended October 31,
	2023		2022		2021
	In millions
Program management	$	—	$	7	$	14
IT costs	91		184		174
Restructuring charges	16		13		22
Gains on real estate sales	(85)		(8)		(3)
Impairment on real estate assets	—		11		4
Other	3		13		29
Total	$	25	$	220	$	240

Restructuring Plans

On May 19, 2020, the Company's Board of Directors approved a restructuring plan in connection with the Cost Optimization and Prioritization Plan which primarily related to labor restructuring and real estate site exits under non-labor restructuring. The changes to the workforce varied by country, based on business needs, local legal requirements and consultations with employee works councils and other employee representatives, as appropriate.

On October 16, 2017, the Company's Board of Directors approved a restructuring plan in connection with the HPE Next Plan, and on September 20, 2018, the Company's Board of Directors approved a revision to that restructuring plan. Headcount exits under the HPE Next Plan were substantially complete as of October 31, 2020. Other restructuring actions primarily related to infrastructure were substantially complete as of October 31, 2022.

Restructuring activities related to the Company's employees and infrastructure under the Cost Optimization and Prioritization Plan and HPE Next Plan are presented in the table below:


	Cost Optimization and Prioritization Plan				HPE Next Plan
	Employee Severance		Infrastructure and other		Employee Severance		Infrastructure and other
	In millions
Liability as of October 31, 2022	$	185	$	122	$	11	$	25
Charges	148		78		6		10
Cash payments	(189)		(64)		(11)		(9)
Non-cash items	8		(9)		—		1
Liability as of October 31, 2023	$	152	$	127	$	6	$	27
Total costs incurred to date as of October 31, 2023	$	793	$	561	$	1,267	$	270
Total expected costs to be incurred as of October 31, 2023	$	820	$	575	$	1,267	$	275

The current restructuring liability related to the transformation programs, reported in the Consolidated Balance Sheets as of October 31, 2023 and 2022, was $180 million and $191 million, respectively, in Accrued restructuring, and $22 million and $28 million, respectively, in Other accrued liabilities. The non-current restructuring liability related to the transformation programs, reported in Other non-current liabilities in the Consolidated Balance Sheets as of October 31, 2023 and 2022 was $110 million and $124 million, respectively.