HP To Announce Major Reorganization, Will Combine Printers, PCs
HP CEO Meg Whitman is expected to announce a major shift in its business structure today. Henceforth, the Personal Systems Group (PSG), which includes consumer PC sales, and the Image and Printing Group (IPG) will be combined into a single business structure. The move is a curious one, given that it combines what's typically been one of HP's star earners (IPG) with the low-margin / huge volume PC group. As part of the deal, longtime HP executive Vyomesh Joshi is expected to seek more time with his family; the combined unit will be headed by HP vice president Todd Bradley.
When HP announced its FY 2011 results last month, Whitman's tough talk telegraphed a move like this. "We've got to streamline our processes, we've got to optimize our supply chain, we've got to reduce SKUs, we've got to rationalize our go-to-market so that we can save money in the OpEx line so that we can then reinvest in the -- growing product lines, we can invest in our fast-growth businesses and we can invest in innovation. So what never works in business is, "Let's keep our cost structure the same and just layer investment on top of that when we're in a situation in which we find ourselves."
HP will likely save some money by combining the two product segments, but it's not a move that tells us anything new or interesting about how the company plans to differentiate itself from the likes of Apple, or how it will reinvigorate its flagging image and printing business. Sales in that segment fell last year for reasons variously blamed on the hard drive shortage in Thailand, a strong Japanese yen, and the Fukushima earthquake last March. HP may have decided to keep its PC business after investor reactions sent the stock skidding last year, but the company's plans for reinvigorating its brands have yet to materialize.
When HP announced its FY 2011 results last month, Whitman's tough talk telegraphed a move like this. "We've got to streamline our processes, we've got to optimize our supply chain, we've got to reduce SKUs, we've got to rationalize our go-to-market so that we can save money in the OpEx line so that we can then reinvest in the -- growing product lines, we can invest in our fast-growth businesses and we can invest in innovation. So what never works in business is, "Let's keep our cost structure the same and just layer investment on top of that when we're in a situation in which we find ourselves."
HP will likely save some money by combining the two product segments, but it's not a move that tells us anything new or interesting about how the company plans to differentiate itself from the likes of Apple, or how it will reinvigorate its flagging image and printing business. Sales in that segment fell last year for reasons variously blamed on the hard drive shortage in Thailand, a strong Japanese yen, and the Fukushima earthquake last March. HP may have decided to keep its PC business after investor reactions sent the stock skidding last year, but the company's plans for reinvigorating its brands have yet to materialize.
