Hewlett-Packard (HP) today officially announced their plan to split into two entities. The first will include the company’s enterprise services, software, and servers known as Hewlett-Packard Enterprise while the other one will focus on its PC and printing businesses and will be known as HP Inc.
HP CEO Meg Whitman will sail in both the boats. She will manage Hewlett-Packard Enterprise as president and CEO while holding a position of non-executive chairman of HP Inc.’s board. Dion Weisler, current executive vice president of HP’s Printing and Personal Systems business, will take over as HP Inc.’s chief executive.
Adoption of this new structure might be HP’s move to remain competitive in the business and regain its position in the PC world. The most recent financial statement suggests that its $42.6 billion PC and printer business saw a 3.1% sales increase during the nine months but fell behind Lenovo in the PC industry.
The break-up will be a tax-free distribution of shares to shareholders. A number of big companies, including eBay Inc. have chosen to split up lately, because of a belief that operations with different growth profiles are best managed as separate entities. HP seems to follow the same belief in order to cover the sales decline it incurred recently.