HP PC business to merge with printing unit

Hewlett-Packard has revealed it will merge its Personal Systems Group (PSG) and Imaging and Printing Group (IPG) into a new Printing and Personal Systems Group, confirming rumours that began to circulate around the industry yesterday. Having failed in its aborted attempt to sell off its PC division

Hewlett-Packard has revealed it will merge its Personal Systems Group (PSG) and Imaging and Printing Group (IPG) into a new Printing and Personal Systems Group, confirming rumours that began to circulate around the industry yesterday.

Having failed in its aborted attempt to sell off its PC division last year, HP believes it makes more sense to combine the two mature business units into one structure so that they can approach customers and partners with an integrated offering.

The firm claimed today that the combo would rationalise its go-to-market strategy, branding, supply chain and customer support, leading to enhanced customer experience and driving innovation.

"This combination will bring together two businesses where HP has established global leadership," said CEO Meg Whitman.

"By providing the best in customer-focused innovation and operational efficiency, we believe we will create a winning scenario for customers, partners and shareholders," she added.

The merger is Meg Whitman's first major strategic gambit at the helm, and will certainly play well to the peanut gallery; last month Whitman said HP was "too complex and too slow" and pledged to demolish its siloed business structure.

However in the wake of the announcement the heat will be on Whitman to work her magic in double quick time. Both IPG and PSG saw decling sales, profits and shipments during its most recent quarter, and hardware margins remain wafer thin.

The merger will see IPG head Vyomesh Joshi stepping down from his role, with PSG boss Todd Bradley taking overall control of a unit that will be HP's largest in revenue terms by some considerable margin.

At the same time as the headline announcement, HP revealed a number of other changes to its operational structure, which will see its Global Accounts Sales organisation join the newly-named HP Enterprise Group, which is to comprise of ESSN and Technology Services under David Donatelli.

Marketing functions, meanwhile, are to be moved into a new unified organisation working across its business technology units under Marty Homlish, HP EVP and CMO. HP said this would allow for more effective cross-organisation marketing and branding activities.

Other changes include the consolidation of HP's communications function, and some back office operations.

HP gave no indication as to whether or not the restructuring would be accompanied by any role redundancies.

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