Hewlett-Packard, a pioneer in business computers, plans to break into two parts as it separates its personal-computer and printer businesses from its technology services.
As early as Monday, the tech giant plans to announce the breakup, first reported Sunday by The Wall Street Journal and confirmed by other media and a person familiar with the matter. CEO Meg Whitman, who has led a multiyear restructuring, would serve as chairman of the PC and printer business and CEO of the separate company, which would be chaired by HP’s current lead independent director Patricia Russo, according to several published reports.
HP CEO Meg Whtiman
An HP breakup, which has been under discussion for more than a year, would follow recent corporate splits as companies aim to satisfy shareholders by sharpening their focus. On Tuesday, online-auction giant eBay said it was spinning off its PayPal payments-processing unit.
“We have no comment,” HP spokeswoman Sarah Pompei said Sunday of the latest report. The Journal said the breakup is expected to occur as a tax-free distribution of shares to the company’s stockholders next year.
“The major benefit I see in the move is that the enterprise business will have a singular focus on the data center, and the PC and printer business can be a lot speedier and agile,” said Patrick Moorhead, president of Moor Insights & Strategy, a tech analyst firm. He said HP will need to ensure its PC and printer business has enough cash to compete in both the consumer PC and emerging smart home markets.
HP, founded 75 years ago in a garage in Palo Alto, Calif., where it’s currently based, has been trying to reverse sagging sales as it faces tough competition from Oracle and IBM. In 2012, under Whitman’s leadership, it merged its PC business with its more lucrative printer one.