If there has ever been a company that has struggled to reinvent and find itself and its former stature in consumer and commercial technology, it’s HP.
There was a time when HP had no equal in several product segments, such as test & measurement, calculators, pocket PCs/personal assistants, etc., but those days are long gone. Sure, the company reigns in printers, and their desktop and mobile workstations are utilitarian (although the HP Z1 is a notable exception), but not nearly as competitive as in the good old days.
In an attempt to return to its former glory days, HP said Monday that it will split into two public companies with one side focusing on its cloud and enterprise market (Hewlett-Packard Enterprise), and the other on personal systems (computers) and printers (HP Inc.). The company also plans to cut another 5,000 jobs.
Although it’s a couple years old, check out HP’s CEO, Meg Whitman explain her plans for reviving HP:
Interview with Meg Whitman, HP CEO – The Plan to Revive HP
Some of the highlights of the announcement include:
- Hewlett-Packard Enterprise will build upon HP’s leading position in servers, storage, networking, converged systems, services and software as well as its OpenStack Helion cloud platform
- Meg Whitman to be President and Chief Executive Officer of Hewlett-Packard Enterprise; Pat Russo to be Chairman of Hewlett-Packard Enterprise Board
- HP Inc. will be the leading personal systems and printing company with a strong roadmap into the most exciting new technologies like 3D printing and new computing experiences
- Dion Weisler to be President and Chief Executive Officer of HP Inc.; Meg Whitman to be Chairman of the HP Inc. Board
- Company reiterates fiscal 2014 non-GAAP diluted net earnings per share (EPS) outlook of $3.70 to $3.74 and updates GAAP diluted net EPS outlook to $2.60 to $2.64
- Company issues fiscal 2015 non-GAAP diluted net EPS outlook of $3.83 to $4.03 and GAAP diluted net EPS outlook of $3.23 to $3.43
Immediately following the transaction, which is expected to be completed by the end of fiscal 2015, HP shareholders will own shares of both Hewlett-Packard Enterprise and HP Inc. The transaction is intended to be tax-free to HP’s shareholders for federal income tax purposes.
The announcement comes as HP approaches the fourth year of its five-year turnaround plan. Over this time, the company has executed at least somewhat successfully against its turnaround objectives.
“Our work during the past three years has significantly strengthened our core businesses to the point where we can more aggressively go after the opportunities created by a rapidly changing market,” said Meg Whitman, Chairman, President and Chief Executive Officer of HP. “The decision to separate into two market-leading companies underscores our commitment to the turnaround plan. It will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics, while generating long-term value for shareholders. In short, by transitioning now from one HP to two new companies, created out of our successful turnaround efforts, we will be in an even better position to compete in the market, support our customers and partners, and deliver maximum value to our shareholders.”