HP combining printing, PC divisions
Hewlett-Packard Co. on Wednesday said it will combine its printer and PC divisions to save money, part of the technology company's effort to turn around its business.
The move comes at a time when sales of printers and ink, once HP's lifeblood, are falling as people increasingly share documents and photos online.
HP is the world's No. 1 maker of personal computers. But PC sales are hurting, too, as people turn their attention to tablets and smartphones.
The Palo Alto, Calif., company says the combined unit will be led by Todd Bradley, executive vice president of the PC group since 2005. Vyomesh Joshi, executive vice president of the printing group, is retiring after 31 years with HP.
HP didn't say what effect the restructuring would have on jobs. In a 2009 shake-up of the printing, PC and other divisions, HP cut 4,400 jobs.
HP had 349,600 workers as of the end of October.
The company said combining the two divisions will improve HP's branding, supply chain management and customer support. The printing and PC units together made up about half of HP's $30 billion revenue in the first quarter.
It's one of the first major steps taken by former eBay chief Meg Whitman since she became HP's CEO in September. Her predecessor, Leo Apotheker, had wanted to sell or spin off the PC business, a plan that contributed to his ouster after 11 months on the job. Under Whitman, HP has said it plans to keep the unit.
Revenue from the printing division has fallen 13 percent from fiscal 2008's peak of $29.6 billion to $25.8 billion for the most recent fiscal year, which ended in October. Meanwhile, operating profit of the printing division has dropped from $4.6 billion to $4 billion.
Former CEO Mark Hurd had been trying to make the company less dependent on printer ink for most of its profits when he was ousted in the wake of a sexual harassment investigation.
The PC division, while less profitable, has held up better. Sales are down 6.4 percent from 2008, to $39.6 billion, while operating income has been flat, at $2.4 billion.
The technology blog AllThingsD first reported the restructuring plan Tuesday, citing unnamed people.
Shares dipped 17 cents to $23.81 in morning trading.
The company's annual shareholder meeting is scheduled for Wednesday.