Hewlett-Packard to split into two public companies, lay off 5,000

Hewlett-Packard Co (HP) said it would split into two listed companies, separating its computer and printer business from its faster-growing corporate hardware and services operations, and eliminate another 5,000 jobs as part of its turnaround plan, Reuters reported Monday.

HP said its shareholders would own a stake in both businesses through a tax-free transaction next year. Each business contributes about half of HP's revenue and profit.

The 75-year-old company has struggled to adapt to the new era of mobile and online computing.

CEO Meg Whitman told Reuters the newly created HP Inc would mostly stick to its knitting - PCs and printers - for now, while exploring related markets such as 3D printing.

The company has no plans to venture into the hotly contested consumer mobile devices market, where it stumbled years ago.

"There's still lots of opportunities in other adjacencies, where we don't chase the market leaders," said Whitman, who will be CEO of HP Enterprise, the business that will sell computer servers and networking gear and data storage to business.

Some analysts expressed skepticism about the latest move.

Barclays analysts noted that the sudden announcement in 2011 was disruptive to HP's sales, its sales force and demand.

"If the [latest] decision by HP isn't well communicated or is not well executed, the negative share shifts could be material," they said in a note.

A spinoff of the PC business was last proposed in 2011 by then-CEO Leo Apotheker.

HP said it planned to cut 5,000 more jobs as part of its multi-year restructuring, raising the total under Whitman to 55,000. The company now has more than 300,000 employees.