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Published on : Oct 06, 2014

Hewlett-Packard Co. has plans of splitting into two companies; one which will deal with services and hardware operations, and the other that will deal with printers and personal computers. The company will be declaring its latest move today. The splitting of the business will involve tax-free allocation of shares to shareholders in the year 2015. This business separation plan will mark a new beginning for Hewlett-Packard Co. which is a 75 year old company that was founded by Bill Hewlett and Dave Packard in a garage in California. 

Many technology companies are considering this trend of business splitting. For instance, IBM has shed its hardware operations, and has also sold its PC unit to Lenovo Group Ltd., China. EBay also declared the spinoff of its unit of PayPal. 

According to sources, Whitman will be the chairman of the printers and personal computers company and also the CEO of the enterprise business of Hewlett-Packard Co. Patricia Russo, who is currently the lead independent director, will be the chairman of the printer and PC operation business. And Dion Weisler, who is currently the vice president of the printer and PC operations business will become the CEO of the business. 

Whitman, who took over as CEO in September 2011, has been undertaking job cutting measures for bringing down costs, and also introducing new products. Hewlett-Packard Co. has not performed well in the area of mobile computing in a world which is dominated by tablet and smart phone users. 

A business professor at the University of Michigan has stated that the printer and PC business spinoff will have a very temporary long-term impact on shareholder value if the enterprise business fails to take off.