HP has decided to combine its ultra-profitable Imaging and Printing business unit with its underachieving Personal Systems unit, which is responsible for PCs and the like.
HP will put current printer chief Vyomesh Joshi in charge of the new, larger business unit. Longtime HP exec Duane Zitzner will retire from the company, leaving his post as head of the Personal Systems group. Joshi has been praised for his success running the printer division and will now be charged with trying to boost the output of the PC group.
"Over the past few years, Duane has led the Personal Systems Group through a significant turnaround, with profitability improvements in each year," said Carly Fiorina, HP's chairman and CEO. "He has successfully stabilized the business, returned it to profitability and growth, and leaves it in a healthy position for continued improvement under Vyomesh."
HP says the creation of its Imaging and Personal Systems Group (IPSG) should "accelerate profitable growth, leverage the power of its portfolio and strengthen its market position." HP last year made a similar move by combining its services and enterprise hardware units. This merger resulted in cost cuts as HP trimmed staff. Beyond cost cutting, HP is likely hoping that it can spur sales of its PCs, laptops, workstations and handhelds by linking these products more closely with its printing and imaging gear.
Analysts have been calling for much bolder moves from HP. Many would like to see the company spin off its printer business as a new company or at least form a new company that combines all of HP's consumer products. The consumer side of the house has proved much more profitable than HP's enterprise businesses.
HP will continue to report financial results from both the Imaging and Printing and Personal Systems units separately. This removes some concern that HP would try and hide lackluster PC performance under its strong printer performance. ®