Why Hewlett – Packard decided to split into two companies

“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.

Meanwhile generating long-term value for shareholders.”

/Meg Whitman president and chief executive officer of Hewlett Packard/

 

Hewlett – Packard, a major tech corporation has been undergoing a multi-year restructuring. PC and printer business will use the name HP Inc. The services business will take the name Hewlett-Packard Enterprise.

HP CEO Meg Whitman will lead the Enterprise business. HP PC and printer chief Dion Weisler will be CEO of HP Inc. Current lead independent director Pat Russo will be chairman of the Enterprise unit, Hewlett- Packard announced.

It has also been cutting costs and laying off tens of thousands of employees. And as more computing moves to mobile devices, Whitman has tried to steer HP’s business into the growing demand for cloud-computing systems.

In August, HP reported good news: a sales uptick. It said a resurgence in PC shipments helped boost its year-over-year revenue 1% to $27.6 billion. Its Personal Systems group, which includes PCs and notebooks, grew 12% in that time.

An HP breakup, which had been under discussion for more than a year, would follow recent corporate splits as companies aim to satisfy shareholders by sharpening their focus. On Tuesday, online-auction giant eBay said it was spinning off its PayPal payments-processing unit.

Shares of HP soared in Monday’s pre-market trading session on the confirmation of the separation plans and job cuts;  the stock was up more than 5% as the opening bell approached.  Year-to-date, shares have gained more than 27%.

 

 

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