HP Merges PC, Printing Units As New Boss Makes Her Mark

Hewlett-Packard (NYSE: HPQ), the No. 1 computer company, said it will merge its PCs with its printers unit, amid other internal changes ordered by new CEO Meg Whitman.

The goal is to make the lumbering giant in Palo Alto, Calif., more profitable and take advantages of economies of scale. HP's PC business is the world's biggest as its its Imaging and Printing Group in the printers sector.

We believe we will create a winning scenario, Whitman said in announcing the shift, which also includes the retirement of printing czar Vyomesh Joshi, 57.

HP now will house both units under the umbrella Printing and Personal Systems Group, whose annual revenue may amount to more than half of total revenue. In fiscal 2011, HP's total revenue was $127.2 billion. The unit will be run by Todd Bradley, 50, who had headed the PC business.

Former CEO Leo Apotheker last year broached the idea of selling or spinning off the PC unit because of slowing sales but Whitman decided to keep it.

Shares Get No Whitman Bounce

Shares of HP fell 46 cents to $24.52 at midday. They are down nearly 9 percent for the year but only about 2 percent since Whitman, 55, the defeated 2010 Republican candidate for governor of California, was elected CEO last September.

Whitman, a billionaire as a result of her former post as CEO of eBay (Nasdaq: EBAY) has said she was conducting an internal review assisted by Executive Chairman Ray Lane, 64, former president of Oracle (Nasdaq: ORCL).

Whitman also said the company's Global Accounts Sales unit will be merged into a new HP Enterprise Services Group, headed by David Donatelli, in a bid to match rival IBM (NYSE: IBM) in its focus on industry verticals. Former sales chief Jan Zadak will be reassigned.

The CEO also elevated Marty Hornish, an Executive VP, who will oversee all HP marketing as Chief Marketing Officer. Similarly, communications will be managed by Harry Gomez, another Executive VP who will be Chief Communications Officer.

HP will also shift its real estate operations out of its finance sector into its global technology and business processes unit.

Whitman didn't say if HP will lay off any personnel. Under former CEO Mark Hurd, HP fired 12,500 people, about 10 percent of the total, shortly after he became CEO in 2006. Hurd was fired in 2010.

HP employed nearly 350,000 people at the end of its first quarter in January.