Silicon Valley giant Hewlett-Packard Co. plans to split into two different companies to focus more on the corporate services market, which is growing faster, Wall Street Journal reported Sunday.
The move to split would be a monumental reshaping for this tech pioneer, which has 300,000 employees and is expecting to rake in $112 billion revenue for the fiscal year of 2014.
HP will have a different company for its computer and printer business, and another separate company for its corporate hardware and service operations. Meanwhile it will spin the unit off to its stockholders next year through a tax-free distribution.
HP is one of the pioneers that established Silicon Valley. It was founded by Bill Hewlett and Dave Packard back in 1939 at a garage in Palo Alto, California.
But now, the company’s printing and personal computing business provides half of its revenue and profit.
The company has been struggling to keep up with the fast changing mobile and online computing technologies of this generation. HP has a market value of $66 billion, which is a far cry from Apple’s $596 billion and Microsoft’s $380 billion. Even Chinese PC Company Lenovo has overtaken HP as the number 1PC maker by shipments.