Hewlett-Packard has confirmed reports it plans to split into two separate companies as the PC slowdown continues hit the firm.
As rumoured earlier on Monday, the company will be broken up into two separate entities; the first is a consumer arm called HP Inc. that will focus on personal computing, printing, 3D printing and ‘new computing experiences.’
The second company will be a corporate-focused company called Hewlett-Packard Enterprise, which will deal in corporate computing, software and infrastructure and finance.
The split will mean another 5,000 jobs are being cut at the company, bringing the total number of job losses to 55,000 since Meg Whitman took over as CEO in 2011.
Whitman says the break-up is vital if the firm is going to be competitive in the future.
In an interview with Recode she said: “One HP was absolutely the right thing to do at the start. We had to turn around the company. We had to fix the balance sheet. We had to get each business optimized.
“There was so much work to do. It was the right thing to do that work as one HP. The turnaround made today possible. We were in no shape then to do anything other than hunker down. We are in much better shape now than we were then. Now we’re in a position to create two market-leading companies which serve different customers. … It’s actually the next step in the turnaround.”
She also added: “Anything can happen in the world of business and technology. What I will say is these will be two market-leading companies with strong balance sheets and with good leadership teams. It will take a year to do the split, but we intend for them to be strong independent companies.”
The stock market reacted will to the split with HP’s share price jumping by 8 per cent following the announcement.
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