Hewlett-Packard Enterprise, or HP, a major playing in both the printing and computing industries, has announced its decision to break down the organization into smaller pieces. It will create two distinct publicly-traded groups, with one company focused on servers, software and cloud technology, and one company focusing on the legacy computers and printers business, according to the Wall Street Journal.
Current CEO Meg Whitman will head Hewlett-Packard Enterprise, the company intended to be focused on cloud computing. Dion Weisler, current executive vice president of HP's printing and personal systems business, will lead HP Inc.
"The decision to separate into two market-leading companies underscores our commitment to the turnaround plan. It will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics, while generating long-term value for shareholders," Whitman said in a statement to the press Monday morning. "In short, by transitioning now from one HP to two new companies, created out of our successful turnaround efforts, we will be in an even better position to compete in the market, support our customers and partners, and deliver maximum value to our shareholders."
In today's technology marketplace, where innovation, reaction time and speed are key elements to success, the change can help both organizations respond more rapidly to changes in market conditions.
However, with the myriad changes, employees may require reassurance as to their role in the new organization and how the changes will increase competitiveness. Change management consulting can help each organization minimize resistance and excite employees about future prospects.
Large organizations "spinning off" certain divisions has become a popular strategy to increase competitiveness. Recently, EBay Inc. spun of its PayPal division, and IBM has had numerous offshoots, most notably separating itself from Lenovo Group. This trend speaks to the increased speed of the modern marketplace, and the need for organizations to react quickly and remain nimble.