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Los Angeles - Hewlett-Packard said it would split into two listed companies,
separating its computer and printer businesses from its faster-growing
corporate hardware and services operations.
A report in the Wall Street Journal on Sunday stated that Silicon Valley stalwart Hewlett-Packard, which has struggled to adapt to
the new era of mobile and online computing, plans to split into two
companies as it looks to put more focus on the faster-growing corporate
services market.
The move would be a monumental reshaping of one of technology's most important pioneers, which still has more than 300 000 employees and is on track to book $112bn in revenue this fiscal year.
Under the reported plan, HP will separate its computer and printer businesses from its corporate hardware and services operations, and spin the unit off through a tax-free distribution of shares to stockholders next year.
A company spokesperson declined to comment on the report.
HP's printing and personal computing business accounts for about half its revenue and profit, according to last quarter's financial results. It is not clear how many of HP's staff work in each of the planned businesses.
Market value
Founded by Bill Hewlett and Dave Packard in a Palo Alto, California garage in 1939, HP was one of the companies that shaped Silicon Valley and the PC revolution. Lately, however, it has struggled to adapt to the shift toward mobile computing, and it has been overshadowed by younger rivals.
HP's market value of $66bn is dwarfed by Apple's $596bn and Microsoft's $380bn.
It has also been overtaken by aggressive Chinese PC maker Lenovo, which is now the world's No 1 PC maker by shipments. Dell, which is HP's closest US competitor and facing similar pressure, was taken private by founder Michael Dell in 2013.
HP is the latest in a line of companies, often under shareholder pressure, to spin off operations in an attempt to become more agile and to capitalise on faster-growing businesses. Last week online auction company eBay said it would spin off electronic payment service PayPal.
HP and some of its investors have long considered such a move, the Journal report noted. As one of the older big computer companies, for several years HP directors have discussed ways to restructure to keep up with technology upstarts.
A source familiar with the matter said HP had held merger talks with storage and cloud-computing firm EMC recently, as a way of moving more forcefully into online services.
Many investors and analysts have called for a break-up of the company, or a sale of the personal computer business, so that HP could focus on the more profitable operations of providing computer servers, networking and data storage to businesses.
PCs
Company executives have said in the past that personal computers underpin and support the company as a whole. HP did consider spinning off its PC division in 2011 under then-CEO Leo Apotheker, but ultimately decided against the idea.
The Journal, citing one of its sources, said the plans call for current HP CEO Meg Whitman to become CEO of the new so-called enterprise company and also be chair of the PC and printer company.
Current HP lead independent director Patricia Russo would be chair of the enterprise company. The CEO of the PC and printer company would be Dion Weisler, who is currently an executive in that division, the report said.
* This article has been updated.
