Hewlett Packard 'planning to split into two'

Hewlett-Packard is planning to split into two companies as it looks to put more focus on the faster-growing corporate services market, according to a Wall Street Journal report.

The move, which could be announced on Monday, would be a monumental reshaping of one of technology's most important pioneers, which still has more than 300,000 employees and is on track to book $112bn (£70bn) in revenue this fiscal year but has struggled to adapt to the new era of mobile and online computing.

Under the reported plan, HP will separate its computer and printer businesses from its corporate hardware and services operations and spin the unit off through a tax-free distribution of shares to stockholders next year.

A company spokeswoman declined to comment on the report.

HP's printing and personal computing business accounts for about half its revenue and profit, according to last quarter's financial results. It is not clear how many of HP's staff -about 300,000 people - work in each of the planned businesses.

Founded by Bill Hewlett and Dave Packard in a garage in Palo Alto, California in 1939, HP was one of the companies that shaped Silicon Valley and the personal computer revolution. Lately, however, it has struggled to adapt to the shift towards mobile computing and has been overshadowed by younger rivals.

HP's market value of $66bn is dwarfed by Apple Inc's $596bn and Microsoft Corp's $380bn.

It has also been overtaken by aggressive Chinese computer maker Lenovo, which is now the world's number one, based on shipments. Dell, which is HP's closest US competitor and facing similar pressure, was taken private by founder Michael Dell last year.