HP is to split up into two publicly traded Fortune 50 companies, with its PC and printing business set to be hived off from its enterprise division, the hardware giant has confirmed.
News of the proposed arrangement was reported by the Wall Street Journal yesterday, who said the tech giant's computing and printing business would be separated from its enterprise hardware and services arm.
The proposed split has now been confirmed by HP, and is expected to be completed before the end of HP's 2015 financial year.
It will also come at a cost of around 5,000 jobs at the company, bringing the total number of roles that have been canned at the company since current CEO Meg Whitman took over in 2011 to 55,000.
The firm's Printing and Personal Systems (PPS) unit accounts for around half of HP's revenues.
The printing and PC business will be known as HP Inc, and will be run by current Printing and Personal Systems chief Dion Weisler, with HP CEO Meg Whitman as chairman.
Meanwhile, Hewlett-Packard Enterprise will operate with independent director Patricia Russo as chairman, and Whitman as CEO.
In a statement, announcing the news, Whitman said the move comes at an important point in the firm's five-year turnaround strategy.
"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," she said.
"The decision to separate into two market-leading companies underscores our commitment to the turnaround plan."
She then went on to say the decision will provide each company with the "independence, focus, financial resources and flexibility" needed to respond quickly to changing customer demands.
"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."
HP considered spinning off its PC business three years ago in 2011 when Leo Apotheker was in the CEO hot seat.
This caused panic among investors, and ended with Apotheker being shown the door. Once Whitman became CEO after Apotheker's departure she said PCs were important in the company's plans to build long-term relationships with customers.
The PC business has rebounded of late with a strong revenues in its third quarter results. Sales in its Personal Systems Group were up 12 per cent last quarter to $8.7 billion with printing contributing another $5.6 billion. Combined, these made up half of HP's revenues for the quarter.
Divesting parts of the company is nothing new for HP. In 1999, the firm split off its test and measurement businesses into Agilient Technologies.
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