Hewlett-Packard to Split in Two

Technology giant Hewlett-Packard plans on breaking in two, separating its PC and printer business from its corporate hardware and services operations. The Wall Street Journal reported that the company plans to announce the move as early as Monday, less than a week since eBay revealed a plan to separate the e-commerce giant from its PayPal business. Investors and insiders alike have long called for Hewlett-Packard to make the same move so that the 75-year old company could focus on the more profitable business of selling computer servers, networking and data storage to corporations and less on its struggling PC business.

While the company is expected to have revenues of $112 billion for 2014, its market value of $66 billion does not begin to compare with the $596 billion and $380 market value of tech giants Apple and Microsoft, respectively. As one of the oldest big technology companies, HP has been having internal discussions to determine new strategies to keep up with younger or more aggressive competitors. One such competitor is Chinese PC maker Lenovo, which has overtaken HP as the worlds number 1 PC maker by shipments.

CEO Meg Whitman has launched a multitude of programs to make the company more competitive, including a multi-year restructuring plan in which she laid off thousands of employees and slashed other unnecessary costs. She has also tried to lead HP into growth sectors such as cloud software, but has struggled to gain any significant hold of the market. Now, in a reversal of her earlier policies stating that the PC business was lucrative for growth and an essential part of HP’s operations, Whitman plans to become CEO of the new enterprise company and chairman of the PC and printer company.

Following eBay, whose shares rallied following the decision to split last week, Hewlett-Packard’s announcement sent shares up 4.2 percent to $36.68 on heavy volume.


By: Michelle Sigalov

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