Hewlett-Packard's corporate split comes as mobile focus wanes

Hewlett-Packard's decision to split itself into two publicly traded companies, with one focused on personal computing and printing and the other on enterprise services and networking, comes as the company continues to move further away from the mobile device market.

HP said it will split into two separate companies, with CEO Meg Whitman leading Hewlett-Packard Enterprise. Dion Weisler, an executive in the firm's PC and printer operations, will be CEO of the HP Inc. business focused on those areas. Each company will have more than $50 billion in revenue, according to the Wall Street Journal.

Additionally, HP said it now plans to cut a total of 55,000 jobs as part of its five-year restructuring after identifying "incremental opportunities for reductions." HP had previously projected its job cuts to be between 45,000 and 50,000; the firm has already slashed 36,000 employees under the restructuring program as of the end of its most recent quarter, according to the WSJ.

The announcement indicates Whitman has reversed her thinking on the idea that HP should split. In 2011 she halted plans by her predecessor Léo Apotheker to spin off HP's PC business. The changes also come as HP retreats from the mobile device business in order to focus more carefully on corporate servers and networking.

In January Qualcomm (NASDAQ:QCOM) purchased a trove of mobile-related patents from HP and its Palm subsidiary to bulk up its mobile patent portfolio. Terms of the deal were not disclosed.

HP famously purchased Palm and its patents in 2010 with an eye toward selling phones and tablets running the company's webOS operating system. However, under Apotheker, the company shuttered its smartphone business shortly after buying Palm for $1.2 billion. HP made webOS an open-source project after that and in 2013 LG Electronics acquired the webOS mobile operating system from HP, stating it would resurrect the platform to power smart TVs, not smartphones.

In January, HP said it would start selling smartphones again, starting first with a pair of phablets in India. It's unclear exactly what HP plans to do in the future with smartphones. The company made no mention of smartphones in its new announcement that it would split its business. HP representatives didn't immediately respond to questions on the topic.

As for networking technology, HP is a major supporter of the Network Functions Virtualization trend, and last week joined a group of wireless stalwarts in creating the Open Platform for NFV Project (OPNFV), a group dedicated to accelerating NFV deployments under the auspices of the Linux Foundation. NFV will enable carriers to virtualize hardware functions and turn them into software within their networks. By running commodity hardware that uses customized software, carriers can cut costs.

For more:
- see this HP statement
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this Reuters article
- see this NYT article

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