That decision is being made to maximise the combined portfolio, the memo said, and scotches speculation that one or the other group could be spun off.
Here is what HP told its employees:
To: All HP Employees
From: Carly Fiorina
In the past year, we have made a number of changes focused on leveraging HP’s tremendous capabilities for leadership. We integrated Global Operations and IT, created CSG, and unified storage, servers, services and software under TSG — all important steps in our journey to drive value creation for HP. Now, we are taking the next step to allow us to deliver more powerfully on our execution priorities of accelerating profitable growth, achieving benchmark cost structures, improving performance discipline and accelerating our go-to-market initiatives.
Effective immediately, we are combining the Personal Systems Group (PSG) and the Imaging and Printing Group (IPG) to create the Imaging and Personal Systems Group (IPSG). Vyomesh Joshi (VJ), currently executive vice president of IPG, will lead this new group and will continue to report to me. Under VJ’s leadership, this new organization will drive profitable growth, leverage the power of the combined portfolio, and strengthen and unify our capabilities to beat our competition.
To continue to provide maximum visibility to our performance, HP’s external segment reporting will not change. Regions will continue to operate as they do today.
For some time, Duane Zitzner, executive vice president of the Personal Systems Group, has been discussing with both his family and me his intention to retire from HP. However, Duane chose to postpone his retirement until he felt that PSG had achieved greater stability in terms of profitability and growth, and was on solid footing for the future. In light of PSG’s recent achievements – including Q4′s record profitability – Duane and I decided the timing was right to make this move. Duane will work closely with VJ to ensure a smooth transition.
Duane has led PSG through a significant turnaround with profitability improvements over the past three years. He has successfully stabilized the business and returned it to profitability and growth. A 15-year HP veteran, Duane has played a key role in the company’s success. He began his career with the company in 1989, joining the Roseville Networks Division in California as a section manager. In the mid 1990s, his leadership propelled HP’s PC business to the No. 3 position globally. Duane also presided over the debut of the company’s Superdome server and the integration of HP and Compaq’s personal systems businesses following the merger. We will all miss his commitment to employees, competitive tenacity, and indefatigable spirit.
I can think of no better person to lead this new organization than VJ. Under his leadership, IPG has grown to be a $24.2 billion business with 10 consecutive quarters of both revenue and profit growth. He has driven steady cost and profit improvements across IPG while ensuring HP continues to lead the market in virtually every imaging and printing category in which we compete.
Combining IPG and PSG builds on the highly successful partnership VJ and Duane have already established. This collaboration resulted in some of the company’s Big Bang and Digital Entertainment initiatives, and a number of go- to-market programs for both the SMB and consumer segments. And it was this partnership that allowed us to demonstrate the awesome power of HP at this month’s Consumer Electronics Show in Las Vegas, where we delivered on our digital entertainment strategy with a host of new solutions. The new IPSG organization is the next logical step to continue our momentum and will maximize efficiency, accelerate time-to-market, and intensify our competitive focus.
While this set of decisions represents a tremendous opportunity to continue to improve our performance, we also must stay focused on executing against our current priorities and closing the quarter with a strong finish. I am confident I can count on all of you to deliver. I know VJ looks forward to building a winning team that serves customers better than anyone in the world.
Please join me in congratulating VJ on his new responsibilities and thanking Duane for his incredible contributions to HP. We wish him a wonderful and well- deserved retirement.