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Job cuts likely in HP's overhaul of printing group
2008-06-18
SAN FRANCISCO - Hewlett-Packard Co. is reshuffling a highly profitable division that makes computer printers and ink cartridges in a shake-up likely to trigger job cuts. In an internal memo sent Wednesday, the world's largest technology company said it will pare its printing and imaging group from five to three business units. The shift will meld together the imaging group's units responsible for ink jet and Web solutions aimed at consumers and small businesses and will combine its laser jet and enterprise operations catering to corporate customers. The reorganization, expected to take effect Aug. 1, will enable HP to "reduce complexity and eliminate duplication" while focusing the printing and imaging division on its biggest growth opportunities, according to the memo from Vyomesh Joshi, who oversees the affected operations. As part of the overhaul, HP will "rebalance resources as necessary in order to meet the needs of the new structure," said company spokesman Ryan Donovan. He declined to estimate how many workers might be laid off. Job cuts have been a recurring theme at HP since it hired Mark Hurd as chief executive three years ago. Shortly after his arrival, Hurd drew up plans to eliminate 15,000 jobs and has been periodically pruning the payroll while trying to wring more profits from virtually every part of the Palo Alto-based company. The strategy has paid off so far as both HP's earnings and stock price have steadily improved. The printing and imaging group has traditionally been HP's most profitable, largely because all of the money that the division makes from selling printer ink. In the first six months of HP's current fiscal year, the division earned $2.38 billion on revenue of $14.9 billion. But the operating profit improved only 6 percent compared to last year, a pace lagging other HP divisions Hurd has already reorganized.
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