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HP to spend more than a billion pounds for its separation

It's been three months since HP started planning its split into two huge tech companies, and now it's figured out how much money it will cost the company.

During the quarterly earnings conference call, HP's chief financial officer Cathie Lesjak explained how much the split will cost the company, and what it means for future business.

The company will need to spend about $2 billion (£1.3 billion) to split into two Fortune 50 companies - $1.3 billion (£837 million) of pre-tax separation costs in its current fiscal year (2015), and another $500 million (£322 million) in its next fiscal year (2016).

In the materials published (opens in new tab) with the conference call (PDF) it also says that the company will pay some $750 million (£483 million) of foreign taxes, after it receives about $200 million (£130 million) of foreign tax credits.

"The scale of this separation is unprecedented in it's size and complexity," explained Lesjak, Business Insider reports (opens in new tab).

CEO Meg Whitman added, "We are separating into two Fortune 50 companies. It's hard to imagine that there are two Fortune 50 companies embedded inside HP."

Creating two huge companies out of one even bigger requires a lot of one-time costs, like setting up two individual IT systems, consulting fees, legal fees, and the foreign taxes thanks to HP's enormous presence on the international stage.

Currently, no layoffs have been mentioned, however, people will be losing their jobs in the future, that's certain.

Lesjak confirmed on Tuesday that layoffs will come, however she didn't go into details on how many jobs will be cut.

Sead Fadilpašić is a freelance tech writer and journalist with more than 17 years experience writing technology-focussed news, blogs, whitepapers, reviews, and ebooks. And his work has featured in online media outlets from all over the world, including Al Jazeera Balkans (where he was a Multimedia Journalist), Crypto News, TechRadar Pro, and IT Pro Portal, where he has written news and features for over five years. Sead's experience also includes writing for inbound marketing, where he creates technology-based content for clients from London to Singapore. Sead is a HubSpot-certified content creator.