The cost-cutting measures were to occur within the company's newly formed Hewlett Packard Enterprise unit, according to the announcement on Tuesday.

The unit is aiming to reduce annual costs by $2 billion (1.77 billion euros), while also making $700 million in savings related to the spinoff. Between 25,000 and 30,000 job losses are expected.

In the separation of the business into two parts, Hewlett Packard Enterprise will focus on cloud computing, servers, software and other technology services. Meanwhile, the other unit - HP Inc. - will control the personal computer and printer hardware operations.

"Hewlett Packard Enterprise will be smaller and more focused than HP is today, and we will have a broad and deep portfolio of businesses that will help enterprises transition to the new style of business," said HP chairman and chief executive Meg Whitman.

Decades of tradition

Whitman is to head the enterprise unit after the split, which is planned for late October. The move breaks up a business that was formed in the 1930s by Stanford University graduates Bill Hewlett and Dave Packard. The fledgling firm was founded in a garage in Palo Alto, California, and provided a template for future Silicon Valley entrepreneurs.

The pair adopted an employee-friendly philosophy that became known as the HP Way. The company took a change in direction under former CEO Carly Fiorina, now a candidate for the Republican Party's nomination for the 2016 presidential race.

Fiorina presided over more than 30,000 job cuts and the controversial takeover of PC maker Compaq before she was forced to resign in 2005.

rc/sms (AFP, AP)