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HP poised to merge printer, PC divisions?
Whitman fires up blender, sharpens axe
HP's boss-for-six-months Meg Whitman is about to make her first big strategic move since she took the reins at that reeling company, merging its Imaging and Printing Group and Personal Systems Group.
So says AllThingsD, citing the ever-loquacious "sources familiar with the matter", who also said that current PSG headman Todd Bradley will lead the new mash-up, and that IPG boss Vyomesh Joshi will retire after 31 years of service at the company.
Whitman has more than hinted that such major moves could be expected. During a conference call with analysts this February after HP announced disappointing financial results for the first fiscal quarter of this year, she said "It's clear, from both our revenue and margin profile, that our current cost base just isn't affordable. On the current trajectory, we just won't have the capacity that we need to invest."
The merging of IPG and PSG would almost certainly cut costs by cutting jobs – in the two groups' marketing and sales departments, at minimum.
During that same call, she also offered the opinion that HP's operating groups had become too insular. "For years, we've been basically running our business in silos," she said. "And under that model, we built some of the leading franchises in technology, but it's also made us too complex and too slow."
Merging IPS and PSG will certainly dismantle one of those silos by combining two of HP's most prominent, consumer and business–focused divisions under the same roof.
One of those two groups, PSG, was almost lost to the company during the flailing reign of short-time HP CEO Léo Apotheker, who had planned to spin it off. After Apotheker was given the boot by HP's oh-so-political board and Whitman was brought on, that plan was dropped.
Although HP declined to comment when we asked about AllThingsD's report, from where we sit the combination of IPG and PSG appears to be rational. After all, they sell to the same customers, and more-streamlined and better-coordinated product development, sales, and support efforts could eliminate some of the complexity and slowness that Whitman decries.
That is, if a unified group that would account for about half of all of HP's revenues could manage to achieve anything resembling nimbleness. ®