HP Plans Overhaul of Printer Division

Channel powerhouse Hewlett-Packard Co. plans to overhaul its printer unit on Aug. 1, cutting the division from five business units to three in a move to increase efficiency and move its focus from that of a traditional printer company to that of a printing company.

Channel powerhouse Hewlett-Packard Co. plans to overhaul its printer unit on Aug. 1, cutting the division from five business units to three in a move to increase efficiency and move its focus from that of a traditional printer company to that of a printing company.

HP made the announcement to employees in a Webcast on Wednesday, according to a published report in The Wall Street Journal.

The new arrangement will see HP eliminate its Web services and supplies business units. The action isn't expected to have a great impact on VARs and other channel partners. A company spokesman said no layoffs are anticipated because of the reorganization.

The changes will effectively consolidate HP's laser-jet and commercial-printer units into one operation, change the head of the graphics unit and combine the ink-jet and consumer-supplies units. The realignment effectively places hardware, services, supplies and solutions in one area instead of having them operate as separate business units.

The printing division has already eliminated hundreds of jobs in its offices in Idaho, Oregon and Washington State, but the company said the new action isn't expected to lead to additional layoffs, according to the company.

The printer business has long been one of HP's  largest profit centers, but consumers and businesses have become less reliant on printing in recent years. The printer unit earned $2.38 billion over the first two fiscal quarters.

The move also coincides with shifting trends in the company's business. During HP's last quarterly financial report,  executives said the company was seeing strength in notebook, blade, midrange storage and software sales, especially in overseas regions.

Mark Hurd, HP's CEO, called the U.S. market "very spotty." HP also has been putting a greater emphasis on non-hardware revenues, recently announcing the acquisition of systems integrator EDS in an effort to strengthen its services business and compete more effectively with rivals such as IBM.

That $13.9 billion purchase is  HP's biggest since its $19 billion buy of Compaq in 2002. Adding EDS to the mix is expected to double HP's services revenue, which amounted to $16.6 billion in fiscal 2007.

(This article was adapted from Internetnews.com and contains information from Reuters news service.)

TAGS: services,IBM,HP,printers



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