HP’s U-turn on PSG business
HP (NYSE:HPQ) has performed a U-turn on its controversial decision to ditch its PC and tablet business.
In a statement released yesterday, new CEO Meg Whitman (pictured) said: “Keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees.”
She added: “HP is committed to PSG, and together we are stronger.”
The decision came after a “strategic review” that looked into: “the depth of the integration that has occurred across key operations such as supply chain, IT and procurement... the significant extent to which PSG contributes to HP’s solutions portfolio and overall brand value [and] the cost to recreate these in a standalone company outweighed any benefits of separation.”
The outcome concluded by stating that HP’s board of directors “is confident that PSG can drive profitable growth as part of the larger entity and accelerate solutions from other parts of HP’s business.”
The decision to spin off PSG was announced by Whitman’s predecessor, Leo Apotheker, as part of a strategy to focus HP on software and services. However, the BBC reports HP shares fell 20 percent the day after Apotheker announced the possible spin-off of the PC arm, and lost 40 percent of their value during his tenure.
While HP has admitted communication with partners regarding the PSG business “has been poor”, some also suggested that HP would “throw Apotheker under the bus” when he was replaced by Whitman, with the firm actually hanging on to PSG.
Shares in the company rose 4.8 percent yesterday.
