According to reports, Hewlett-Packard Co. is all set to separate its personal-computer and printer businesses from its corporate hardware and services operations, the latest attempt by the technology company to improve its fortunes by breaking itself in two.
H-P, which Bill Hewlett and Dave Packard famously started in their Palo Alto, Calif., garage in 1939, now will be carved up: One part, HP Inc., will consist of the company’s personal-computer and printer businesses. The other, Hewlett-Packard Enterprise, will sell computer servers, data-storage gear, software, consulting operations and other services for corporate-technology departments.
Each of the companies will be about the same size, with more than $50 billion in annual revenue.
H-P Chief Executive Meg Whitman said Monday that the two companies will be on very different courses. The new HP Inc. will be milked for cash, which will be earmarked for returns to stockholders. The enterprise company, which Ms. Whitman will run, will be operated for growth through a faster pace of investment in new products and through acquisitions, executives said on a conference call with analysts.
The reorganization, set to be completed by the end of fiscal year 2015, will take place as a tax-free distribution of shares to the company’s stockholders.
Separately, H-P also boosted Monday the number of expected layoffs it has planned by 5,000 to 55,000, after identifying “incremental opportunities for reductions.” H-P had previously projected its job cuts to be between 45,000 and 50,000, and it already has shed 36,000 employees under the restructuring program as of the end of the most recent quarter.