Business & Real Estate

HP confirms split; effect on Roseville operations unknown

Hewlett-Packard Co., the pioneering Silicon Valley computer company that was the first to bring high-tech jobs to the Sacramento region but has struggled in the past decade, confirmed Monday that it’s splitting itself into two distinct companies.

The company declined to say what the split will mean for its once-booming operations in Roseville, which once employed more than 6,000 workers but have declined in recent years to around 2,500.

HP announced it will separate its personal computer and printer sales from its more successful corporate computing services by October 2015, the end of the company’s fiscal year.

Some 5,000 more jobs will be eliminated as part of the restructuring, HP said, pushing the company’s total job cuts by layoffs and retirements over five years to 55,000.

HP, which has struggled with its PC sales of desktop and laptop computers in an era of mobile devices, noted that it’s approaching “the fourth year of its five-year turnaround plan.”

The company’s successful software, services and corporate computing unit will become known as Hewlett-Packard Enterprise and will be run by Meg Whitman, the current president and chief executive of HP.

The other company, known as HP Inc., will focus on personal computers and printers. It will be led by Dion Weisler, executive vice president at the old HP’s printing and personal systems business. Whitman, the one-time unsuccessful Republican candidate for California governor, will be chairman of HP Inc.’s board.

Whitman, who took over as HP’s CEO in 2011, said in a statement Monday that the decision to split “into two market-leading companies underscores our commitment to the turnaround plan.” She said each new company will gain “the independence, focus, financial resources and flexibility they need to adapt quickly to market and customer dynamics, while generating long-term value for shareholders.”

HP wouldn’t say what will happen to the struggling Roseville business but indicated decisions have yet to be made. “At this time, we have no further announcements,” said HP spokeswoman Sarah Pompei in an email. “This will be a 12-month process.”

Palo Alto-based HP was the first major technology company to build a significant base in the Sacramento area, opening a manufacturing and distribution center in Roseville in 1979. For years, the Roseville workforce churned out computers, servers and other products.

HP’s success in Roseville paved the way for others, such as Intel Corp. and Apple Inc. But in the years following HP’s takeover of Compaq in 2001, the Roseville operations have been pared back significantly. Its last manufacturing business, in computer servers, was consolidated into Compaq’s factories in Texas more than a decade ago, eliminating about 500 jobs.

Another 250 jobs in Roseville were moved to other HP locations as recently as March, as part of the restructuring of the printer and personal computing division.

As its presence in Roseville has diminished, the company has been leasing out portions of its campus to other companies.

Shares of Hewlett-Packard Co. rose nearly 5 percent Monday on the New York Stock Exchange, closing at $36.87. The stock is up nearly 32 percent since the beginning of the year. Once the company’s split is complete, HP stockholders will own shares of both companies.