Hewlett-Packard, also known to the world as HP, is finally getting ready to split into two companies. The company has been known for more than a year to go through the process of separation. It seems that the company that started it all in a small garage located in California 75 years ago, has finally reached its final conclusion. The splitting has not been officially stated from HP themselves, however many people linked to HP have already confirmed the move to happen publicly tomorrow or early this week.
The company will be a separation between its personal computer, printer, and laptop series while the other side will solely take care of software, data storage devices, and various servers. Obviously, HP has been low on sales and has not been hitting the target they would like to be at. The new alteration to the company should increase sales and provide more functions to mobile gadgets in their eyes. It's not easy being as big of a company as HP and dealing with other fierce competitors like IBM and Oracle. Only time will tell if the risky decision HP is making, won't lead to another catastrophe in the future. President of Moor Insights & Strategy as well as a computer analyst, Patrick Moorhead gave his opinion on the separation of the company,
"The major benefit I see in the move is that the enterprise business will have a singular focus on the data center, and the PC and printer business can be a lot speedier and agile... It’s a good idea for them to do this. HP is such a massive company, and they must have look at the company and decided that the benefits of moving at the right speed outweigh the cost savings.”
HP isn't the only company making major changes, in recent years companies such as Microsoft, Dell, and IBM have changed their chief executives, gone private, or sold parts of their company. The only recent encounter that comes to mind is the spin-off of the link between eBay and PayPal announced a couple of days ago. HP also tried making an improvement a couple of years ago when HP bought British software company Autonomy back in 2011. During that time, the software company was estimated around 11 billion dollars. Much to their surprise, the big investment ended up being a big disaster that forced HP a write-down of 8.8 billion dollars due to "accounting improprieties". Companies are trying to pull many tricks out of their sleeves and not many end up being successful, let's hope that HP can finally come out of the hole they dug over the past few years.
I think we can all agree on something, HP hasn't been the best comparing some of their earliest years. They've been lacking in sales and have definitely been left in the dust by their competitors. Due to financial issues, HP had to layoff more than 50,000 people since 2011. Previously, HP stated that they would increase that number between 11,000 and 16,000 layoffs are to be expected by the end of this month. It seems that many employees will not be entirely happy with the move as it can cost them their jobs in just a few short weeks. HP has been known as one of the strictest companies in terms of letting people go, surely the numbers won't stop there as they are trying to boost their profits and not end up losing more than they gain.
Like stated before, HP hasn't given an official statement of the separation of the company. However, the roles will essentially stay the same for one of the entities. Dion Weisler, an executive that's part of HP will take the role of the PC and printer operation as a CEO. While as the current CEO of HP, Meg Whitman will become chairman. Only one known role in the new enterprise company has been known, the fact that current lead independent director Patricia Russo will take the role of chairman. It has not been known as to what either company is going to be named, or if a simple naming modification will be applied to HP.
Tell me Se7ensinners, what do you think of the move by HP? Personally, I think it's one of their last attempts to gain back more sales from their products and like Patrick stated the business will become more speedy.