Hewlett-Packard Co. (HPQ) will combine
its personal-computer unit with the division that sells printers
in an effort to cut costs and simplify management, a person with
knowledge of the matter said.
Todd Bradley, who runs the PC division, will become head of
the new unit, while Vyomesh Joshi, who runs the business focused
on imaging and printing, plans to depart, said the people, who
asked not to be identified because the move hasn’t been made
public. Technology blog AllThingsDigital previously reported the
Chief Executive Officer Meg Whitman is attempting a
turnaround at the world’s largest PC maker, which has suffered
from declining sales and profits. Since taking the reins last
September, she has committed to increase investment in research
and development and decided against a proposal to spin off the
$39.6 billion personal systems group, known as PSG.
During a conference call last month, Whitman told analysts
that the company’s PCs, printers and information-technology
services haven’t been compelling enough to attract customers’
spending. The $25.8 billion imaging and printing unit is seeing
sluggish orders from consumers and small offices, she said.
“For years, we’ve been basically running our business in
silos,” she said. “We underinvested in innovation.”
Analysts estimate that Hewlett-Packard sales will decline 4
percent to $122.4 billion this year, according to data compiled
by Bloomberg. Excluding some items, earnings are projected to
drop 17 percent to $4.04 a share.
Bradley joined Hewlett-Packard in 2005 and vaulted the
company past Dell Inc. as the top PC maker. Joshi, who is known
as “VJ,” started in 1980 as a research engineer.
“PSG under Todd Bradley has been HP’s best performing
division,” Brian Marshall, an analyst at ISI Group, said in a
research note. Hewlett-Packard’s more mature, cash-generating
divisions are under his control, while Executive Vice President
Dave Donatelli runs growth businesses, including data storage
and networking, Marshall said.
By reuniting the PC and printer divisions, Hewlett-Packard
is undoing a change made by former CEO Mark Hurd. He broke up
the units in 2005, during his first year running the company.
Hewlett-Packard is scheduled to hold its annual shareholder
meeting tomorrow in Santa Clara, California
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