HEWLETT-PACKARD [HP] - Falling revenues, organizational reshaping and job cuts have brought a 3 year old plan back on the table at HP.
It was three years ago when Chief Executive Meg Whitman first broached, and subsequently dismissed, the subject of separating out the PC division; at the time her decision was thought to be the best response to the company’s crisis. Now, the plan is back and is the latest attempt to improve the company’s bottom line.
With the news, shares have risen by 7.9 per cent from opening of market.
The announcement to divide the HP personal computer and printer business away from corporate hardware and services operations has led to investors having more confidence in the tech company. The value of the two divisions, as separately publicly traded companies, will free up value and give an estimated $50 billion annual revenue for each. The proposal reported by Wall Street Journal will see ‘a tax-free distribution of shares to stockholders next year’.
This year, HP has announced 16,000 lay-offs, with a total forecast job cuts of 50,000. Through 2014 HP shares have risen but they are not close to previous valuations. The issue to divide the two HP business modules see HP joining the ranks of those separating: eBay and PayPal being a recent example.
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