HP Merges Computer and Printer Units

March 21, 2012
The merger will help free up cash for innovation as the company scrambles to compete with booming smartphone and tablet markets.

Hewlett-Packard (IW500/7) said on March 21 that it is combining its computer and printer units to free up more cash for innovation in the rapidly evolving technology market.

HP will combine its Imaging and Printing Group and its Personal Systems Group (PSG) into an entity headed by Tom Bradley, who has been PSG executive vice president since 2005.

HP declined to comment when asked whether the corporate reorganization would result in a cut in its work force.

"We have no specific announcements about changes to headcount at this time," an HP spokesman told AFP.

The merging of the units comes as growth in the printer market, once a gold mine for the company, slows to a trickle and people increasingly turn to smartphones and tablets for their Internet needs.

HP last month reported lower quarterly net profit and revenue as slumping personal computer sales dragged down earnings at the world's largest computer maker.

HP last year said it was readying plans to spin off its PC division and stop making tablet computers, but reversed course later after naming Meg Whitman as chief executive.

The Palo Alto, California-based HP said net profit fell 44 percent during the first quarter of its fiscal year to $1.5 billion compared to the same quarter a year ago, while revenue was down seven percent to $30.0 billion.

Whitman said in an earnings conference call that the company was "taking the necessary steps to improve execution, increase effectiveness and capitalize on emerging opportunities."

Whitman, a former chief executive of eBay and unsuccessful candidate for governor of California, took the reins at HP in September after her predecessor, Leo Apotheker, was ousted after just 11 months on the job.

HP said revenue declined 15 percent at its PC unit during the quarter, with commercial sales down seven percent and consumer sales falling by 25 percent.

The low-margin PC market has been flat amid an astronomical increase in powerful smartphones and the arrival of hot-selling tablet computers such as the iPad.

HP said printer revenue was down seven percent in the quarter.

HP on Tuesday also said it was reorganizing its sales, marketing, real estate, and communications units.

"Ensuring we have the right organizational structure in place is a critical first step in driving improved execution," said Whitman.

Copyright Agence France-Presse, 2012

See Also:
"Whitman Says Apple Could Overtake HP as World's Top PC Maker in 2012"
"Weak Growth for PC Shipments Expected This Year"

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