Hewlett-Packard Confirm Plans to Split In Two
- Sunday, October 5th, 2014
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Technology company Hewlett-Packard is planning to split its consumer and corporate facing services off into two separate businesses, it has confirmed.
In a move that seemingly echoes the recently announced eBay/PayPal split, the company will be spinning off into two distinct companies in order to place more focus on its corporate hardware and services business, which is proving more profitable and faster-growing.
The company, which has struggled to adapt to the increasingly mobile and online world, still employs 300,000 across its different business areas, and is on track to bring in $112bn (£70bn) this fiscal year. The split is expected to be complete by the end of fiscal 2015.
The firms printing and personal computing business accounts for around half its revenue and profit, according to last quarters financial records, but has not shown the same growth that the business-facing side has. It was recently overtaken by Chinese firm Lenovo, which has become the global leader in PC shipments.
The companys enterprise technology infrastructure, software and services businesses will be gathered together as Hewlett Packard Enterprise, while the personal and printing businesses will operate as HP, and retain the current logo.
“Our work during the past three years has significantly strengthened our core businesses to the point where we can more aggressively go after the opportunities created by a rapidly changing market,” said Meg Whitman, chairman, president and CEO of HP. “The decision to separate into two market-leading companies underscores our commitment to the turnaround plan.
It will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics, while generating long-term value for shareholders. In short, by transitioning now from one HP to two new companies, created out of our successful turnaround efforts, we will be in an even better position to compete in the market, support our customers and partners, and deliver maximum value to our shareholders.”