Hewlett-Packard Is Said to Combine Its PC and Printing Units

Hewlett-Packard Co. (HPQ) will combine its personal-computer unit with the division that sells printers in an effort to cut costs and simplify management, a person with knowledge of the matter said.

Todd Bradley, who runs the PC division, will become head of the new unit, while Vyomesh Joshi, who runs the business focused on imaging and printing, plans to depart, said the person, who asked not to be identified because the move hasn’t been made public. Technology blog AllThingsDigital previously reported the planned reorganization.

Chief Executive Officer Meg Whitman is attempting a turnaround at the world’s largest PC maker, which has suffered from declining sales and profits. Since taking the reins last September, she has committed to increase investment in research and development and decided against a proposal to spin off the $39.6 billion personal systems group, known as PSG.

During a conference call last month, Whitman told analysts that the company’s PCs, printers and information-technology services haven’t been compelling enough to attract customers’ spending. The $25.8 billion imaging and printing unit is seeing sluggish orders from consumers and small offices, she said.

‘In Silos’

“For years, we’ve been basically running our business in silos,” she said. “We underinvested in innovation.”

Analysts estimate that Hewlett-Packard sales will decline 4 percent to $122.4 billion this year, according to data compiled by Bloomberg. Excluding some items, earnings are projected to drop 17 percent to $4.04 a share.

Bradley joined Hewlett-Packard in 2005 and vaulted the company past Dell Inc. as the top PC maker. Joshi, who is known as “VJ,” started in 1980 as a research engineer.

“PSG under Todd Bradley has been HP’s best performing division,” Brian Marshall, an analyst at ISI Group, said in a research note. Hewlett-Packard’s more mature, cash-generating divisions are under his control, while Executive Vice President Dave Donatelli runs growth businesses, including data storage and networking, Marshall said.

By reuniting the PC and printer divisions, Hewlett-Packard is undoing a change made by former CEO Mark Hurd. He broke up the units in 2005, during his first year running the company.

Hewlett-Packard is scheduled to hold its annual shareholder meeting tomorrow in Santa Clara, California

To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net