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HP splits again, as Hewlett Packard Enterprise spins off IT services

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Dion Esparza
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In 2014, Hewlett-Packard announced that it was splitting into two separate companies: Hewlett Packard Enterprise, selling servers and enterprise services, and HP Inc, selling PCs and printers.

The low-margin outsourced IT services business, which HP got into with its $14 billion acquisition of EDS in 2008, is to be merged with Computer Sciences Corp CSC to create a new company currently known only as SpinCo.

Additionally, the merger will see some $2.5 billion in debt moved to SpinCo's books.

Even before the split, Whitman announced plans to replace 60 percent of its IT service staff from the US and Europe with cheaper workers in Costa Rica, the Philippines, Bulgaria, and India, in an effort to boost profitability.

The division has seen its annual revenue decline for a number of years; it's currently around $20 billion, a $4 billion decrease from 2011.

The remaining HPE will continue to sell servers, storage, and network gear, with annual revenue of around $32 billion.

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