HP to Merge Printer, PC Businesses

   on March 21 2012 10:44 AM
File photograph of a woman walking past the Hewlett Packard logo at its French headquarters in Issy le Moulineaux
A woman walks past the Hewlett Packard logo at its French headquarters in Issy le Moulineaux, western Paris, in this September 16, 2005 file photograph. Shares of Hewlett-Packard slumped by more than 20 percent to a six-year low on August 19,2011 as investors wiped about $16 billion off the market value of the world's biggest PC maker in a resounding rejection of its plan for a major shake-up. REUTERS

(Reuters) - Hewlett Packard Co said it was merging its printer and PC business in a major reorganization to save costs and boost growth.

The unit will be headed by HP PC chief Todd Bradley, the company said in a statement on Wednesday.

Reuters had reported on the plans on Tuesday.

Ensuring we have the right organizational structure in place is a critical first step in driving improved execution, and increasing effectiveness and efficiency, Chief Executive Meg Whitman said.

The result will be a faster, more streamlined, performance-driven HP that is customer focused and poised to capitalize on rapidly shifting industry trends, she added.

The company is also planning to unify other functions such as marketing across the business to promote a stronger brand and improve efficiency.

HP, the largest U.S. technology company by revenue, is struggling to keep its core personal computing business in the black as mobile devices from tablets to smartphones eat into sales. The company is trying to reinvent itself as a major enterprise computing provider.

The decades-old corporation, often mentioned in accounts of the founding of Silicon Valley, has been through its share of turmoil in past years.

HP considered for months last year a proposal to sell or spin off its PC arm, known as the personal systems group. That emerged as the company announced it would get out of the business of making tablets with the failure of its TouchPad.

But after Whitman's predecessor and former CEO Leo Apotheker was ousted in September for failing to revive a moribund stock, the company abandoned the idea and deemed personal computers core to its overall strategy.

HP's moves evoked a mixed response from analysts. While they felt Whitman was moving at an impressive speed to fix issues at the company and jumpstart growth, the advantages of the integration were unclear.

It's too early to tell what this is going to do, Sterne Agee analyst Shaw Wu said. The risk I think is that both (divisions) have very different business models.

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