HP to combine PC, printer businesses

SAN FRANCISCO -- Hewlett-Packard says it will combine its printing and PC divisions to save money, part of the technology company's effort to turn around its business.

The Palo Alto, Calif., company says the combined unit will be led by Todd Bradley, executive vice president of the PC group since 2005. Vyomesh Joshi, executive vice president of the printing group, is retiring.

The news was first reported by tech blog All Things Digital.

The jolting move is the second by HP CEO Meg Whitman, who took over the company in September when it jettisoned CEO Leo Apotheker. In October, Whitman, the former CEO of eBay, kept the PC unit after HP considered a spinoff or sale of the $41 billion computer business.

The venerable tech pioneer is struggling to keep its core PC business profitable as consumers and businesses flock to mobile devices. That's forcing Whitman to find ways to streamline the organization so that it's easier for customers to buy PCs and printers together.

"Putting printers and PCs together might spark some creativity," Forrester analyst Frank Gillett says. "Their PC business may be in a better position in the next five years than its competitors because of some of the existing work they've done in touch-enabled computers and all-in-one computers."

The prospect of consolidation is more unnerving news to HP's 350,000 employees, who have seen two CEO changes since late 2010 and witnessed dwindling PC sales.

HP remains No. 1 in the U.S. PC market, but its share fell to 23.1% last quarter, compared with 29.4% a year earlier, according to researcher Gartner. PC shipments nationwide were down 5.9% in the quarter to 17.9 million.

HP contributed to its downturn. Former CEO Apotheker's decision last year to consider a spinoff or sale of its computer business prompted some potential PC buyers to steer clear of the brand or delay major HP equipment purchases. As a result, Dell and Lenovo raided some HP customers, Gartner analyst Mikako Kitagawa says.

Last month, HP reported $8.9 billion in first-quarter revenue for its Personal Systems Group, compared with $10.4 billion in the same period a year ago.

Contributing: Associated Press