HP's restructure initiative has been ongoing for years, leading to tens of thousands of layoffs. This occurred in several phases, with low-margin businesses grouped alongside highly profitable ones. Originally, HP considered spinning off PC devices but later paired it with its highly profitable printing products.
Today, HP announced plans to split into two companies: HP Inc., the aforementioned PC and printing division, and Hewlett-Packard Enterprise, which will handle servers, networking, and other infrastructure as well as enterprise software and services. Shareholders will receive stock in both companies in an "intended to be tax-free" transaction. Obviously, that may vary by jurisdiction.
The reasons are fairly straight-forward. Print and PC are not heavily growing markets, especially not compared to their enterprise division. These two companies are roughly equal in size, so separating them highlights each side's strengths and weaknesses, and allows new investors to bet on one without giving money to the other. While Hewlett-Packard Enterprise is expected to be the higher-growth company, HP Inc. is expected to get into 3D printing as a consumer service. It will also inherit the logo, likely because it is something that consumers still identify with.
Current CEO, Meg Whitman, will be CEO of Hewlett-Packard Enterprise and Chair of HP Inc.
The "transaction" for shareholders is expected by the end of FY15. It will also align with the loss of 5000 jobs, resulting in 55,000 layoffs since Whitman joined the company. I have yet to hear anything about where these cuts will occur.
Man spinning off its test
Man spinning off its test and measurement equipment(the business that started HP) into Agilent Technologies in 1999. Buying some real piggy’s and driving them into the ground, and losing billions. And now the big bifurcation, with printers and PC going off on a branch, while the enterprise/server stuff goes in another! Were will the workstations go? It appears what should have been broken off and discarded was the many generations of incompetent management, and I mean without golden parachutes to ease them down to a gentle landing, and so much of the stockholders money. Hopefully the stockholders will come to their senses, or maybe stockholders of the parts will have better ways of purging upper management of peter principle types that walk the halls of HP’s headquarters.