HP Commences Major Internal Overhaul

by Jordan Richardson on March 21, 2012

Hewlett Packard Co. is commencing a major internal overhaul and combining its PC and printing divisions with designs on boosting hardware sales. Sources speaking anonymously have revealed details of the restructuring to Reuters.

The reorganization is said to be announced soon and will mean that printing chief Vyomesh Joshi steps down. Todd Bradley, the current boss of the PC division for HP, will move into position as the head of the new combined division.

CEO Meg Whitman is apparently gearing the streamlining to “help” consumers buy PCs and printers together as one package. HP also wants to direct extra cash to research and development and wants to keep its personal computing business above water in these days of smartphones and tablets.

Also on the agenda is a recalibration of the company’s image as a “major enterprise computing provider.”

“It’s too early to tell what this is going to do,” Sterne Agee analyst Shaw Wu said of the divisional movement. “The risk I think is that both (divisions) have very different business models.”

HP is still the largest tech company in the United States by revenue, but tumult has certainly threatened to eat away at the corporation’s foundations. Last year, HP went so far as to consider selling off its PC operations (the personal systems group) in an effort to streamline proceedings. The company’s foray into the tablet market fell flat, too, as the TouchPad fizzled.

After the departure of CEO Leo Apotheker, HP seemed to have a change of heart with respect to the PC division and announced it as the “core of its business.”

“Meg Whitman is moving quickly to institute changes, e.g., fewer silos, greater emphasis on R&D, more conservative expectations,” ISI group analyst Brian Marshall said. “Last week, we meet with the head of HP Labs and were impressed with the new organizational focus/direction put in place by CEO Whitman.”

HP is still the clear leader in global PC sales, but those numbers have been slipping in the face of mobile encroachment over the past few years. There are a number of reasons for the decline in PC sales in the face of mobile sales, including the fact that most people aren’t replenishing their PC stocks as frequently as they do their mobile phones, but HP is still looking for an adequate response to the problem.

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Written by: Jordan Richardson. www.digitcom.ca. Follow TheTelecomBlog.com by: RSSTwitterFacebook, or YouTube.

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