HP Plans to Overhaul Printer Unit

HP printers
Source: Reuters

Hewlett-Packard (NYSE: HPQ) will reorganize its printer operations, trimming its five business units to three in a bid to become more efficient, the Wall Street Journal reported on Thursday.

The announcement was made in a Webcast to employees on Wednesday by print division chief Vyomesh Joshi, the newspaper reported in its online edition.

The changes will consolidate HP’s laser-jet and commercial-printer units into one, change the head of the graphics unit and combine the ink-jet and consumer-supplies 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 move would not result in large-scale lay-offs.

The printer business has long been one of the company’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 regions outside of the U.S.

At the time, CEO Mark Hurd called the U.S. market “very spotty.”

HP also has been putting a greater emphasis on non-hardware revenues, recently announcing the acquisition of EDS in a bid to strengthen its services business.

That $13.9 billion purchase — HP’s biggest since its $19 billion buy of Compaq in 2002 — steps up its competition in services against rival IBM (NYSE: IBM) and marks the culmination of several years of effort by HP to expand that segment of its business.

Adding EDS to the mix effectively doubles HP’s services revenue, which amounted to $16.6 billion in fiscal 2007.

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