News

Hewlett-Packard confirms split into two companies

Breakup aims to sharpen focus

Palo Alto-based tech company Hewlett-Packard announced Monday its plans to split the company into two, with one company devoted to HP's computers and printers, which will do business as HP Inc.; and a second devoted to technology services, which will do business as Hewlett-Packard Enterprise.

"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," said Meg Whitman, HP chief executive officer, in a press release.

The reorganization, set to be completed by the end of fiscal year 2015, will take place as a tax-free distribution of shares to the company's stockholders.

Whitman will be president and chief executive officer of Hewlett-Packard Enterprise, while current lead independent director Pat Russo will chair the Hewlett-Packard Enterprise board. Dion Weisler, an executive in the PC and printer operation, will lead HP Inc. as president and CEO, according to the press release.

Comments

1 person likes this
Posted by Wondering?
a resident of Another Palo Alto neighborhood
on Oct 5, 2014 at 7:57 pm

Wonder in either, or both, of these HP spin-offs will be moving their Palo Alto operations to somewhere that is more business friendly, has less traffic-related issues, a more transparent city government, and a city government not trying to find a new tax every year or so to gouge the local businesses?

Certainly losing 5,000 HP employees would lessen our daily traffic mess. That would be a bonus for the city's traffic woes.


2 people like this
Posted by parent
a resident of Downtown North
on Oct 5, 2014 at 10:54 pm

Cutting 5000 high paid jobs will also reduce the demand for housing in our city. That should make homes more affordable for working families.


2 people like this
Posted by Nnnnope
a resident of Barron Park
on Oct 6, 2014 at 6:06 am

I'm wondering if they will move to the moon. Free speculation is fun because you need nothing but an idea in your head...no facts, just a home baked or 1/2 baked idea/wonderment.

Also, if anyone thinks losing 5K jobs @ HP will have any affect on housing costs needs to learn more about our economy. If someone could not afford to buy during the dot com crash and home mortgage crisis, when prices were were down 20-30% from now, don't expect yo will be able to even if HP laid 5K off...which is an arbitrary number made up in a statement of fact-less, pure speculation. The business reports state HP expects to be hiring in some key area like Finance and Security.


6 people like this
Posted by Again?
a resident of College Terrace
on Oct 6, 2014 at 10:48 am

Weren't Verigy and Taligent spin offs of HP? Those didn't work out so well, so why do it again? Do they think three tries will. W the magic charm?

Bill Hewlett and David Packard must be doing flip-flops in their respective graves!


Like this comment
Posted by John
a resident of Barron Park
on Oct 6, 2014 at 12:11 pm

Are there really 5,000 HP employees in Palo Alto?


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Posted by resident
a resident of Midtown
on Oct 6, 2014 at 12:23 pm

Per City of Palo Alto annual report (2011), HP had 2,000 employees working in Palo Alto. I doubt that HP moving to a different city would affect housing prices in Palo Alto. It's been a long time since anyone at HP, except for executive level employees, could afford or want to buy in Palo Alto, because they can get alot more house in the surrounding communities; HP compensation for most employees is pretty much salary, and to get buy a house in Palo Alto requires alot of equity that is most typically created in start ups.

It would reduce traffic, but I doubt those buildings would be vacant for very long.


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Posted by The Shadow knows....
a resident of Crescent Park
on Oct 6, 2014 at 1:02 pm

Effect on stock price?

Stock split?


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Posted by Jo Ann
a resident of Embarcadero Oaks/Leland
on Oct 6, 2014 at 1:12 pm

I think HP will grant shareholders new shares in the new company based on some formula re the value of the 2 separate companies. At least that's how other companies have done it.


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Posted by Sea-Seelam Reddy
a resident of College Terrace
on Oct 6, 2014 at 6:52 pm

Congratulations HP.

This what we like.

Separating into two businesses is a fine way to manage and measure. It allows to look for M&As that will enhanc HP strength.

Meg, you are bold and you are bringing HP values and to be an Innovative company.


Like this comment
Posted by musical
a resident of Palo Verde
on Oct 6, 2014 at 8:09 pm

@Shadow and Jo Ann, that's how I acquired my Agilent shares 15 years ago.

Pretty much an overall zero return, whether Agilent or HP.


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Posted by Sea-Seelam REDDY
a resident of College Terrace
on Oct 7, 2014 at 11:34 am

Watch out Palo Alto citizens

We have a lot of transformation happening on Page Mill Road.

HP is breaking up to 2 BUs

EMC has talked to DELL or HP per WSJ

Theranos next door is moving to their new building on Page Mill.

It is all good things!









Like this comment
Posted by Marlen
a resident of Meadow Park
on Oct 7, 2014 at 10:22 pm

@parent

You're right we should be cheering the loss of high paid jobs, it might clear up some traffic. I'll bet an outbreak of Ebola would also help ease the housing situation.


Sorry, but further commenting on this topic has been closed.

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