HP to combine functions

By Duncan Martell

SAN FRANCISCO - Hewlett-Packard Co. said on Tuesday that it will further streamline its business by combining some operations as the computer maker continues a restructuring that includes more than 15,000 job cuts announced last year.

HP said the move will give its three main business groups -- Imaging and Printing, Technology Solutions and the PC division, Personal Systems -- responsibility for supply chain, logistics, order fulfillment and certain marketing functions.

Asked if the move foreshadows a potential spinning off of one or more divisions, spokeswoman Alexa Hanes said "absolutely not." She said some jobs will be cut, included in the figure announced last year, but the final number is still being determined.

HP has, since before its 2001 acquisition of Compaq, faced pressure from analysts and investors to spin off its personal computer business or its lucrative imaging and printing group.

The shift is meant to bring the three main business groups closer to suppliers and speed up production, Hanes added. "It gives the business units a more direct relationship, specifically with the suppliers," Hanes said. "It's about us being able to improve the speed and efficiency in the work that we're doing with our suppliers and ultimately being able to get products out to our customers."

The previous organisation, under which functions such as procurement and logistics were centralised under a single global operations unit is being dismantled, HP said. Those functions will now be assumed by the three business groups.

The PC business will host central direct procurement and handle procurement for goods across the company. Imaging and printing will be responsible for worldwide logistics, HP said.

HP said the restructuring and job cuts would be completed later this year and would result in a simpler reporting structure with fewer management layers.

Prior to the announcement, shares of HP fell 71 cents, or 2.1 percent, to close at $32.86. In extended trade, the stock ticked higher to $32.94.

(Additional reporting by Philipp Gollner)