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Hewlett-Packard Splits Company Into Two

July 2, 2015 - Written By Joshua Polite

 

One time tech giant Hewlett-Packard confirmed what was long rumored and split into two separate companies. Hewlett-Packard has been seeing their profits slowly slip for the last few years and saw this split as the route to take to save the company. Making matters worse Hewlett-Packard had to endure a lot of management changes as well as a few corporate scandals in the last few years. All while watching other tech companies such as Google, Amazon, and Apple lead and establish the market for things such as smartphones and tablets. The plan is to split into two separate companies and also separate its personal computer side from its business service side. Hewlett-Packard’s reasoning behind this was to make its business structure a bit simpler and to “concentrate its financial resources solely on its own operations,” a company document said.

Hewlett- Packard CEO Meg Whitman has this reason to give for the spit “We needed to be smaller, more nimble, we needed to be more focused,” she said. “And we needed to have a capital structure for each company that would allow them to pursue their objectives.”After filing with the US Securities and Exchange Commission, Mrs Whitman went on to say  “I’m more convinced than ever that this separation will create two compelling companies well positioned to win in the marketplace and to drive value for our stockholders. Since we announced our plan to separate in October, we’ve made significant progress and remain on track to complete the separation by the end of the fiscal year 2015.”

Still breaking up a company as large as Hewlett-Packard is not easily done, investors say it will cost around $2 billion in expenses and fees.  Splitting the company up will give each side around $55 billion in annual revenue, so it seems very clear why CEO Meg Whitman seem’s so confident in this course of action. Once the split becomes official, Whitman will become president and chief executive officer of the HP Enterprise half and non -executive chairperson of HP Inc, the second side of the split. Hewlett-Packard was formed in 1939 by Stanford grads Bill Hewlett and Dave Packard out of a garage in Palo Alto California.  They would eventually turn Hewlett-Packard into one of the world’s largest computer companies specializing in hardware and software.