Meg Whitman said on Wednesday that HP is on track to formally split into two companies in November.
So she told investors at the company’s annual meeting as reported by Bloomberg’s Jack Clark. (We’ve reached out to HP for further comment and will update this post when we hear back.)
The timing isn’t a surprise. When Whitman first announced the split in October (the end of its last fiscal year), she said that the process would take about a year.
Many analysts say that HP’s stock is a good deal prior to the split, since investors will wind up owning shares of two Fortune 50-sized companies afterwards. So now there’s a clearer deadline for that.
Over the past few months, Whitman and CFO Cathie Lesjak have been slowly dolling out bits of information about the split. Here’s a summary:
Whitman also said Wednesday that HP’s iconic and newly redesigned Palo Alto headquarters would remain the HQ of both companies. HP will divvy up the buildings into HP Inc. (the PC/printer division) and HP Enterprise (servers, services, cloud and everything else). HP plans to do the same with all of its locations around the world, Whitman said.
The split will cost about $US2 to $US3 billion, depending on how you count. Lesjak told analysts in February that direct costs this fiscal year (2015) will be $US1.3 billion for things like fees related to finance, IT, consulting, legal and real estate and another $US500 million next year (fiscal 2016). Plus, it expects to pay another $US300 million in capital expenditures. And it thinks it will owe $US750 million in foreign taxes.
HP will likely continue to cut jobs after the split. The company is on target to downsize by 55,000 employees as part of its massive multi-year layoff plan. But HP is still huge, still around 300,000 employees, and Lesjak indicted in February that when the company splits, it could identify more jobs to shed. She didn’t say how many.
Shuffling in the leadership ranks is already happening. A few months ago, HP named the senior execs of both companies, but as the time draws near, that’s already shifting. For instance Marten Mickos was supposed to lead HP’s crucial cloud efforts (which goes by the brand name HP Helion). But he’s already shifted out of that role. Mickos joined HP when the company bought the cloud startup he was leading, Eucalyptus.
(Mickos is well-known in the open-source world for his eight-year stint running database startup mySQL unitl it was bought by Sun Microsystems for $US1 billion in 2008. That ws an astounding sum at the time for a company that essentially gave its software away for free.)
As we’ve previously reported, HP employees we talk to seem pretty un-phased by the ongoing layoffs and separation. They tend to know which company their business unit will belong to. While cutting jobs overall, HP is also investing in hot areas like cloud, networking, and advanced systems, and some of them are finding new jobs in those business units.