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HP To Shrink Printer Operations From Five To Three Units

The laser-jet and commercial printer operations will form one unit, while the ink-jet and consumer supplies operations will constitute another. The third unit will focus on billboards, signs, and professional photography.
Hewlett-Packard will trim its printer division from five to three units as the company moves to streamline its most profitable operation.

The announcement was made Wednesday by Vyomesh Joshi, executive VP of the company's imaging and printing group, in a Webcast to employees, but was not announced publicly by the company. The reorganization will take place later this summer, according to media reports.

HP's laser-jet and commercial printer operations will form one unit, while the ink-jet and consumer supplies operations will constitute another unit. The third unit will focus on billboards, signs, and professional photography.

In its most recent annual report, HP noted that its Imaging and Printing Group made up 27% of the company's revenue. Investment banking analysts following the company have estimated the highly profitable unit accounts for 42% of HP's profits.

News of the reorganization wasn't entirely unexpected as HP chief executive Mark Hurd earlier this year had indicated the company could reorganize the printer unit. Hundreds of HP employees in the printer unit have already lost their jobs or have been reassigned to other posts. The reorganization also follows the announcement of the company's planned acquisition of EDS and the targeting of more printing operations at enterprise services, which will likely complement the EDS acquisition.

In its most recent annual report, HP said it would expand sales coverage in its printer and imaging unit "to accelerate growth in the enterprise business, which we expect to be a $121 billion market by 2010."

A spokesman for HP told The New York Times that the reorganization "is a significant milestone in the overall transformation of the business from being printer manufacturer to a printing company."