First reported by AllThingsD, the reorg’s intended to increase hardware sales as its PC business fends off challenges from tablets and smartphones. CEO Meg Whitman also hopes that by turning two divisions into one, she’ll save enough money to allow for increased R&D.
Combining business units never bodes well for employees, but the impact here remains to be seen.
Writes AllThingsD’s Arik Hesseldahl:
HP sees the two business groups — IPG sells printers both to consumers and businesses and (the Personal Systems Group) sells PCs to consumers and businesses — as making more operational sense combined than apart, the source said. The plan is to have their line of business more readily integrated so they can approach customers together and with unified product offerings.
Though its sales have been declining, IPG still sells more printers than anyone. However, most of its revenue today comes from selling ink cartridges and other supplies to printer owners. In the most recent quarter, HP said its earning from operations dropped 32 percent.
The new unit will be HP’s biggest group, responsible for 51 percent of the company’s revenue. Last year, IPG’s and PSG’s combined sales reached $65 billion, compared to $35 billion for the services group and $22 billion for the Enterprise, Servers, Storage and Networking Group.
Last year, ex-CEO Leo Apotheker proposed spinning off PSG. Whitman, his replacement, decided to keep the division in place.