HP to Spin Off IT Services

HP’s 2015 split into Hewlett Packard Enterprise (HPE) and HP Inc. saw 30,000 jobs disappear. Now the OEM says it is gearing up to make a second split—Hewlett Packard Enterprise is spinning off its IT services business.

According to the OEM, its IT services business will be merged with Computer Sciences Corp (CSC) to establish a new company known only as SpinCo. HPE will own half of the new company with HPE CEO Meg Whitman on the board. CSC’s current CEO, Mike Lawrie, will become CEO of the new company.

HPE reveals the deal will save around $1 billion in operating costs. HPE shareholders will own shares in both companies. They will have stakes valued at around $4.5 billion and receive a $1.5 billion cash dividend.

Lawrie predicts the new company will have revenue of approximately $26 billion, with 5,000 clients in 70 countries. The deal is expected to close by March 2017.

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