Silicon Valley giant Hewlett-Packard to split in two: WSJ

Sun Oct 5, 2014 5:20pm EDT
 
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(Reuters) - Silicon Valley stalwart Hewlett-Packard Co, 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, according to a Wall Street Journal report on Sunday.

The move, which could be announced as early as Monday, 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 $112 billion 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 spokeswoman 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 more than 300,000 staff work in each of the planned businesses.

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 towards mobile computing, and it has been overshadowed by younger rivals.

HP's market value of $66 billion is dwarfed by Apple Inc's $596 billion and Microsoft Corp's $380 billion.

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 U.S. competitor and facing similar pressure, was taken private by founder Michael Dell last year.

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A Hewlett-Packard logo is seen at the company's Executive Briefing Center in Palo Alto, California January 16, 2013. REUTERS/Stephen Lam