HP restructuring printer and personal computer groups

By Lee Kaelin on March 21, 2012, 1:00 PM

Hewlett Packard has announced plans to restructure its core businesses, a move that will see its Image and Printing Group merged into its Personal Systems Group as the American firm looks to stabilize the company and introduce further cost-saving measures.

HP CEO Meg Whitman said in an earnings call last month that the company needed to simplify its business model and cut costs if it was to remain competitive in its respective markets. Whitman believes it makes more sense to combine the two operations so that the firm can approach customers with a more complete product portfolio.

IPG’s current head, Vyomesh "VJ" Joshi is set to retire and the PSG’s current head Todd Bradley will take over the helms of the two merged groups, which will be retitled the Printing and Personal Systems Group. The new group will become HP’s largest within the company.

"This combination will bring together two businesses where HP has established global leadership," said Whitman in an announcement. "By providing the best in customer-focused innovation and operational efficiency, we believe we will create a winning scenario for customers, partners and shareholders."

HP’s IPG was once the group that single-handedly kept the whole brand afloat, earning considerable money on printer sales and the huge profit margins of ink sales. But in recent years sales have dropped considerably, with a 7 percent drop in the firm’s most recent quarterly financial report.

There is no doubt that the two recent natural disasters in Japan and Thailand have dealt HP a huge blow financially. The very strong Japanese Yen, combined with Canon selling printers at a loss has further impacted earnings.

The new group will share procurement and sales staff, and job cuts are expected as they look to reduce costs.  According to figures by the Wall Street Journal, HP had around 349,600 employees at the end of October, but the exact numbers that make up the two groups are unknown. It is also unknown how many jobs will be axed as part of the merger.

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