Hewlett-Packard (HP) has announced it would be splitting into two companies – the HP Inc and the HP Enterprise. The 75-year-Old company Palo-Alto based company fought several calls for a break-up in the past even when the PC business was deteriorating.
As announced, the HP Inc would be in charge of the company’s personal computer and printing business and the HP Enterprise (Hewlett-Packard Enterprise) would take over the company’s hardware and services operation. Like some other PC makers, HP has been also been struggling with consumer PC sales as tastes have now changed to phablets, tablets and smartphones. The company also announced a further 5000 jobs would be cut bringing the total number of layoffs in 2014 to 34,000.
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“The decision to separate into two market-leading companies underscores our commitment to the turnaround plan,” Whitman said. “It will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics.”
Last week, eBay announced it would be spinning off its payment system Paypal, which is fastgrowing. Like most business when they split, the companies argue a changing competitive landscape meant splitting off the two businesses would give each a better opportunity to compete.
Billionaire businesswoman, Meg Whitman would continue as Chairman of HP Inc and CEO of Hewlett-Packard Enterprise. HP’s lead independent director and a former CEO of Lucent Technologies and its successor, Alcatel-Lucent; Patricia Russo, will be Chairman of the Enterprise arm. Current HP Executive in the PC and printer operation, Dion Weisler, will be the CEO HP Inc.
