Technology giant Hewlett-Packard known as HP on 6 October 2014 announced that it will split itself into two separate publicly traded companies. Besides, it also announced to lay off another 5000 employees and invest the saved money on account of lower headcount into research and development.
One part, HP Inc., will consist of the company’s personal-computer and printer businesses.
The other, Hewlett-Packard Enterprise, will sell computer servers, data-storage gear, software, consulting operations and other services for corporate-technology departments.
The cloud-focused company will be named Hewlett-Packard Enterprise. It will be led by current CEO Meg Whitman. The computer-and-printer-focused business will be named HP Inc and led by Dion Weisler. Dion Weisler is currently serving as executive vice president of HP’s printing and personal systems business.
Whitman will serve as non-executive chairman of HP Inc’s board of directors.
HP Inc will retain HP’s existing logo. Current HP shareholders will own shares of both Hewlett-Packard Enterprise and HP Inc once the split is complete.
The split is part of a radical restructuring plan.The split aims at helping the firm adapt to the new era of mobile and online computing. The firm is now in the fourth year of its five-year turnaround plan.
HP said it expected the division to be complete by the end of the 2015 financial year. Shareholders will be given a stake in both businesses. The news makes investors happy which resulted into 5% rise in shares in early trading.
The division of HP's businesses comes at a time when other large tech firms are being urged to break up.
Earlier, in the first week of October 2014, online auction site eBay announced it was splitting off its payments system PayPal into a separate company.
HP has been under pressure from newer rivals such as Chinese firm Lenovo, which overtook HP as the world's largest PC maker in 2012. Third-ranked US rival Dell was taken private in 2013.
Hewlett-Packard Company or HP is an American multinational information technology corporation headquartered in Palo Alto, California, United States.
The company was founded by Bill Hewlett and Dave Packard in 1939. HP helped usher in the PC revolution and now has more than 300000 employees globally.
It provides hardware, software and services to consumers, small- and medium-sized businesses (SMBs) and large enterprises, including customers in the government, health and education sectors.
When: 6 October 2014