Six months into her tenure as CEO, Meg Whitman and the Hewlett-Packard board of directors who hired her made their second major strategic corporate move March 21 when they decided to combine two of the company's hardware businesses into a single entity to save money and improve operational efficiency.
HP's Imaging and Printing Group and its Personal Systems Group will become the Printing and Personal Systems Group. The combined division will be run by HP veteran manager Todd Bradley, who has been the executive vice president of PSG since 2005 and has been on the short list for the CEO job in the past.
The first strategic decision Whitman and the board made last fall was to stop the Personal Systems Group from being either spun off into a new company or sold to a competitor, as had been planned under previous CEO Leo Apotheker.
Realignment Means Leadership Shakeup
The administrative combination of two of HP's largest businesses may help the company in several ways, but it is not without leadership shakeups.
Vyomesh Joshi, executive vice president of the printing group, said he is retiring after a 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, so he leaves the company on pretty good terms.
HP said that combining these two groups -- which, by the way, represent a bit more than half of the corporation's $115 billion yearly revenue -- "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."
Company Also Unifies Other Functions
This wasn't the only internal organizational change the company announced March 21. HP also is taking steps to unify/streamline some other 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.
A new role for Jan Zadak, executive vice president for Global Sales, will be announced at a later date. Zadak will work with Donatelli on 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. HP's communications employees worldwide also will be unified under Executive Vice President and Chief Communications Officer Henry Gomez.
Lastly, HP is moving its Global Real Estate function from Finance into Global Technology and Business Processes to address real estate consolidation. HP is currently is in a moving mode at its headquarters in Palo Alto, Calif., after the company sold its Cupertino, Calif., campus to Apple last year. HP's Cupertino location had housed the company's Executive Briefing Center (EBC) and several other groups.
The EBC is being moved to the main Palo Alto campus and will be housed in a remodeled main HQ building on that property. HP will be out of the Cupertino campus by August. Apple plans to scrape the site and build its own new headquarters building on the property.
Chris Preimesberger is eWEEK's Editor for Features and Analysis. Twitter: editingwhiz