Hewlett-Packard (HP) has been a long standing giant in the computer manufacturing and corporate services scene. However, it looks like things haven’t been going too well. A few years ago, the former Chief Executive Officer, Leo Apotheker, suggested that the company would be doing the same and offloading the less profitable “Personal Systems Group”. Nonetheless, after shareholder object and the take over of current CEO, Meg Whitman, this changed and the Personal Systems Group continued to be a part of HP.
Just last week, HP announced that it plans to split the company into two public trading entities: a corporate services company, Hewlett-Packard Enterprise, and a commercial company, HP Inc., which will consist of the Personal Computing and Printers divisions of the current Hewlett-Packard. It is expected that this move will benefit both companies and the shareholders who will continue to have a stake in both companies. According to HP, the move will allow these companies to focus on their businesses and allow the new HP Inc., to focus on innovating and addressing the market’s needs.
Many have said that this move is return to former CEO, Leo Aptheker’s plan to offload the Personal Computing and Printers divisions – this move making it easier to do so. However, HP claims that the move will give the two resulting companies more flexibility and room to maneuver when it comes to addressing their respective segments.
“Our work during the past three years has significantly strengthened our core businesses to the point where we can more aggressively go after the opportunities created by a rapidly changing market…
The decision to separate into two market-leading companies underscores our commitment to the turnaround plan. It will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics, while generating long-term value for shareholders.”
The new Hewlett-Packard Enterprise will be headed by current CEO Meg Whitman while Dion Weisler will be taking the reigns over at the new HP Inc. It is expected that the move will be completed at the end of fiscal year 2015.