HP to split up into two companies
HP has revealed plans to split up into two publicly traded companies as part of its latest turnaround plan.
The company will divide up into Hewlett-Packard Enterprise - led by current CEO Meg Whitman - and Hewlett-Packard Incorporated.
HP Enterprise will incorporate the vendor’s enterprise technology infrastructure, cloud, software and services businesses. HP Inc will include the company’s PCs and printing business, and will retain the current HP logo.
HP’s current executive vice president for printing and personal systems Dion Weisler will take the reins at HP Inc. On top of being CEO of HP Enterprise, Whitman will assume the role of chairman of the board of the sister company.
The spin-off is expected to allow HP’s enterprise business to dedicate more resources towards its goal of becoming a leader in the enterprise mobility market.
The decision marks a reversal of Whitman’s repeated assertions that it plans to keep HP together. The company’s five-year reorganisation plan had been nicknamed ‘One HP’.
Speaking on a conference call to discuss the split-up plan, as recorded by Fierce Mobile Communications, Whitman asserted that the One HP strategy was the right approach at the time.
“During the fix and rebuild phase of our turnaround plan, we used the strength found in being together to become stronger throughout. But of course, the marketplace never stands still. And in our industry, today more than ever, you have to compete harder and faster every single day,” she said.
“Being nimble is the only path to winning. Separating into two companies will enable each management team to have a sharper focus on the opportunities that the different markets present.”
HP CFO Cathie Lesjak added that the company is considering acquiring managed cloud company Rackspace to augment the HP Enterprise business.
HP has meanwhile increased the planned number of layoffs at the company to 55,000 from 50,000, the Wall Street Journal reported. The company has already let go of 36,000 employees as part of its five-year restructuring program.
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