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HP to split into two companies

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Posted at 12:39 PM, Oct 06, 2014
and last updated 2014-10-06 12:39:19-04

NEW YORK — The next step for computing giant Hewlett-Packard’s restructuring is a split into two companies.

HP announced Monday that it plans to put its PC and printer operations under one roof under the name HP Inc., and its business that provides software and services to corporate customers under another under the name HP Enterprise.

The company said the split will give both companies the focus, financial resources and flexibility to adapt more quickly to the market, while also raising the stock value for shareholders.

Shares of HP jumped more than 7% in premarket trading following the announcement.

The split is expected to be completed by the end of 2015. News of the split was first reported Sunday by The Wall Street Journal.

The split follows a number of spinoffs and breakups this year. Most recently, eBay announced last week it would spin off the online payment platform PayPal, which it bought in 2002.

Meg Whitman, the CEO of HP, took the helm in 2011 and unveiled a five-year restructuring plan. That included a major overhaul of the printer and PC business in 2012. Layoffs have totaled at least 45,000, and the company’s projected savings have reached $4.5 billion per year.

Whitman’s predecessor, Leo Apotheker, considered a corporate split similar to the one announced Monday, but he left the company after only 11 months.

Whitman will have leadership roles at both companies, serving as CEO of HP enterprise business and chairman of HP Inc.. Dion Weisler, the current executive vice president of HP’s printing and personal systems business, will become CEO of HP Inc.