HP merging printing group into Personal Systems Group, webOS printers one step closer to reality [update: confirmed]
HP CEO Meg Whitman's crusade to right the plundered ship Packard is poised to really shake things up at the Silicon Valley giant: according to a report today from AllThingsD, the Imaging and Printing Group is set to be merged into the Personal Systems Group. That'll put HP's still-profitable-but-not-as-much-as-before printers group under EVP Todd Bradley and his computers-and-tablets division.
The move would address cost-cutting and simplification to an extreme degree, especially on the marketing front. If you stop and think about it, both the IPG and PSG largely target the same set of customers: businesses and consumers, often shopping for both printer and computer at the same time. There would also be significant cost savings from combining the redundant human resources and finance operations under each group, plus having one fewer division to manage up top. It also gives Bradley some more to do, perhaps as compensation for having been passed over for the CEO job twice in less than a year, despite his extensive executive experience (once even serving as the CEO of Palm).
Ironically, this consolidation comes just seven months after former HP CEO Leo Apotheker announced plans to split the Personal Systems Group off as a separate company and refocus HP proper on enterprise services and printers. Just half a year later we've seen HP's printing division start to falter as businesses and consumers alike dramatically cut back on their printing (and thus purchases of high-margin ink cartridges). That said, the Personal Systems Group has faltered recently as well, though that can be chalked up to the damage done by the uncertainty of the spin-off and what that would mean for the future of whatever company(s) resulted.
Amusingly, this also puts together two divisions that HP desperately wanted to work together right after their purchase of Palm. You'll recall that the Palm Global Business Unit was slotted in under the Personal Systems Group and Bradley, with the goal of making webOS smartphones and tablets, as well as getting the operating system onto desktop computers and printers - of which HP expected to sell several million. Even then when HP was trying (unsuccessfully) to sell webOS to the highest bidder, they were still running into the sticking point of webOS on printers. Fast forward to today and HP's now in the process of open sourcing webOS with little public thought being paid towards the webOS printer. Maybe in 2013.
Update: HP has announced their plans to merge the Printing and Imaging Group into the Personal Systems Group, giving birth to the Printing and Personal Systems Group, headed by Todd Bradley. Press release is after the break.
HP Announces Organizational Realignment
PALO ALTO, Calif., March 21, 2012
HP today announced an organizational realignment to improve performance and drive profitable growth across the entire HP portfolio.
As part of this realignment, HP’s Imaging and Printing Group (IPG) and its Personal Systems Group (PSG) are joining forces to create the Printing and Personal Systems Group. The combined entity will be led by Todd Bradley, who has served as the executive vice president of PSG since 2005.
Vyomesh Joshi, executive vice president of IPG, is retiring after a highly accomplished 31-year career at HP. Under Joshi’s leadership, IPG has grown revenue from $19 billion to $26 billion, and doubled its operating profit to approximately $4 billion.
“VJ embodies the spirit of HP and his impact on the company has been tremendous,” said Meg Whitman, president and chief executive officer, HP. “Under his leadership, IPG accelerated innovation and pioneered solutions that transformed the printing market. We wish him the very best as he embarks on a new chapter in his life.”
Combining these two entities will rationalize HP’s go-to-market strategy, branding, supply chain and customer support worldwide. This will lead to a better customer experience and drive innovation across personal computing and printing. This realignment is expected to provide opportunities for cost savings and accelerate HP’s ability to pursue profitable growth and reinvest in the business.
“This combination will bring together two businesses where HP has established global leadership,” said Whitman. “By providing the best in customer-focused innovation and operational efficiency, we believe we will create a winning scenario for customers, partners and shareholders.”
In addition to combining PSG and IPG, HP also is taking steps to unify and streamline certain key business functions.
The Global Accounts Sales organization will join the newly named HP Enterprise Group. This group will be led by David Donatelli and includes Enterprise Servers, Storage, Networking and Technology Services.
The new structure is expected to speed decision making, increase productivity and improve efficiency, while providing a simplified customer experience. A new role for Jan Zadak, executive vice president for Global Sales, will be announced at a later date. Zadak will work with Donatelli to ensure an orderly transition.
HP also announced that it will unify its Marketing functions across business units under Marty Homlish, executive vice president and chief marketing officer, HP. This will allow for even more effective brand-building and marketing activities, and will create efficiencies across the business units.
HP’s Communications employees worldwide also will be similarly unified under Henry Gomez, executive vice president and chief communications officer, HP. Together these two moves will create a more powerful voice to demonstrate the power of “One HP.”
Finally, HP is moving the Global Real Estate function from Finance into Global Technology and Business Processes to address real estate consolidation and improve the workplace experience for HP employees.
“Ensuring we have the right organizational structure in place is a critical first step in driving improved execution, and increasing effectiveness and efficiency,” added Whitman. “The result will be a faster, more streamlined, performance-driven HP that is customer focused and poised to capitalize on rapidly shifting industry trends.”
HP creates new possibilities for technology to have a meaningful impact on people, businesses, governments and society. The world’s largest technology company, HP brings together a portfolio that spans printing, personal computing, software, services and IT infrastructure to solve customer problems. More information about HP (NYSE: HPQ) is available at http://www.hp.com.
This news release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of HP and its consolidated subsidiaries could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to statements of the plans, strategies and objectives of management for future operations, including execution of realignment, efficiency and cost reduction programs; statements or projections of cost savings, growth rates, profitability, investment levels or other financial items; statements concerning expected development, performance or market share relating to products and services; statements regarding anticipated operational and financial results, including improving execution and capitalizing on industry trends; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include macroeconomic and geopolitical trends and events; the competitive pressures faced by HP’s businesses; the development and transition of new products and services (and the enhancement of existing products and services) to meet customer needs and respond to emerging technological trends; the execution and performance of contracts by HP and its customers, suppliers and partners; the protection of HP’s intellectual property assets, including intellectual property licensed from third parties; integration and other risks associated with business combination and investment transactions; the hiring and retention of key employees; expectations and assumptions relating to the execution and timing of cost reduction programs and restructuring and integration plans; the resolution of pending investigations, claims and disputes; and other risks that are described in HP’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2012 and HP’s other filings with the Securities and Exchange Commission, including HP’s Annual Report on Form 10-K for the fiscal year ended October 31, 2011. HP assumes no obligation and does not intend to update these forward-looking statements.
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