Hewlett Packard Enterprise is continuing to slim down by selling its business services division to competitor Computer Sciences Corp.
Both companies say the deal is worth about $US8.5 billion ($A11.84 billion) to shareholders in HP Enterprise, one of two companies formed last year by the breakup of struggling tech giant Hewlett-Packard Inc.
HP Enterprise will now concentrate on selling data centre hardware, software and other commercial tech gear to big organisations.
It's spinning off a technology outsourcing and management services business that includes operations the old HP acquired when it bought Electronic Data Systems, for nearly $US14 billion in 2008.
Chief executive Meg Whitman says the "enterprise services" division helped bring in customers.
With roughly 100,000 employees, it contributes more than a third of HPE's revenue. But the division has lagged other segments in both growth and profit. Analysts say some of the operations acquired from EDS were outdated.
Whitman announced the deal on Tuesday as HP Enterprise reported better-than-expected revenue for its fiscal quarter ended April 30.
Investors liked the news: HP Enterprise stock rose more than 10 per cent in after-hours trading after the deal was announced. Shares in CSC surged more than 27 per cent.
Whitman has been trying to overhaul a once-mighty tech conglomerate since she became chief executive of the old HP in 2011.
Nearly a decade ago, the old HP led the tech industry with annual sales above $US100 billion, boosted by several large acquisitions including EDS and the personal-computer maker Compaq.
But the company struggled to keep up with industry trends, as consumers bought fewer PCs and businesses shifted to new models of commercial computing.
Whitman oversaw a split last year that led to the creation of HP Enterprise and a second company, HP Inc, that's focused on selling PCs and printers.
Spinning off the services division will leave HPE with businesses producing about $US33 billion in annual revenue, the company said on Tuesday.
It said the deal should boost annual revenue for CSC to about $US26 billion. HPE shareholders will get a cash dividend of $US1.5 billion and a 50 per cent stake in CSC, which will assume about $US2.5 billion in debt and other liabilities.
Including the services division, HPE reported $US320 million in profit on $US12.7 billion in sales for its most recent quarter. Profit rose 5 per cent and sales were up 1 per cent from a year earlier. Most of the sales growth came from its computer hardware division.
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