Hewlett-Packard Co. (HPQ:US) Chief Executive Officer Meg Whitman is reorganizing the company’s struggling personal-computer business, replacing longtime head Todd Bradley with one of his deputies amid a global PC slump.
Bradley is becoming executive vice president for strategic growth, charged with expanding in China and forming alliances with startups around the world, Hewlett-Packard said yesterday. Dion Weisler, hired by Bradley last year from Lenovo Group Ltd. (992) to lead PCs and printing in Asia, is assuming global responsibility for those units.
CEO since 2011, Whitman is working to turn around Palo Alto, California Hewlett-Packard after seven straight quarters of declining sales (HPQ:US) and years of management tumult and strategic missteps. While Hewlett-Packard overtook Dell Inc. (DELL:US) to reclaim the No. 1 position in the PCs for six years under Bradley, the company has been slow to adapt to a global shift away from desktop machines to smartphones and tablets.
“Todd went from running half of HP to looking at little companies, which seems like a demotion,” said Brian Marshall, an analyst at ISI Group who has a neutral rating on the shares. “Weisler isn’t a known entity on the street but is battle tested and worked at a high level job at Lenovo.”
Under former CEO Leo Apotheker, Hewlett-Packard was weighing a spinoff of the personal-computer division -- a proposal that Whitman scrapped. The company still plans to keep the PC and printing divisions, Michael Thacker, a spokesman for Hewlett-Packard, said in an interview.
“We’re 100 percent committed to the printing and personal systems business,” Thacker said. Yesterday’s “announcement doesn’t change that,” he added.
He said the job change represents “a lateral move” for Bradley.
While a spinoff is not currently under serious consideration, and the company hasn’t retained bankers to handle a deal, management occasionally discusses the prospect, according to a person with direct knowledge of the matter who asked not to be identified because the talks are private.
Former CEO Mark Hurd brought Bradley to the company in 2005 from PalmOne Inc. to help establish the PC business as a separate unit from printing, a decision that was reversed last year by Whitman. She placed Bradley in charge of both businesses in March 2012 after deciding against Apotheker’s spinoff proposal as part of a turnaround effort.
Each pivot in the direction of the computing business has made Hewlett-Packard’s customers uncertain about the brand, exacerbating the effects of the global PC slowdown.
“Todd Bradley has made a series of strategic mistakes; his departure should have happened long before,” Trip Chowdhry, an analyst at Global Equities Research, wrote in a research report.
Among other shortcomings, Bradley has been overly reliant on machines running Microsoft Corp.’s new Windows 8 software, which hasn’t caught on with consumers, Chowdhry said.
Microsoft’s latest version of its flagship operating system, which can work on touchscreen devices, didn’t sell as well as expected in the months following its debut in October, Bradley said in a January interview with Bloomberg Television.
While printers and PCs generated sales of $60.1 billion for Hewlett-Packard in the 2012 fiscal year, or half of all revenue, those businesses contributed 60 percent of sales in the 2005 fiscal year, according to data (HPQ:US) compiled by Bloomberg.
Lenovo overtook Hewlett-Packard to claim the the top spot in the PC market last year, highlighting the challenges facing Whitman as she strives to revive growth.
At the same time, global PC shipments plummeted 14 percent in the first quarter of 2013, the worst decline since researcher IDC began tracking data in 1994.
“The entire market has slowed down,” Richard Shim, an analyst at NPD DisplaySearch, said in an interview. “No one has done a good job of managing this shift from notebook PCs to tablets other than Apple.”
Hewlett-Packard’s share of the notebook market in China and the Asia-Pacific region was 7.3 percent in the first quarter, Shim said, in fifth place trailing companies including Lenovo and Dell.
Weisler has more than 23 years of experience in the technology industry, much of it at Asia-based computer makers. Before Lenovo, he worked at Acer Inc. (2353) Nick Lazaridis will take over Weisler’s duties in Asia, Hewlett-Packard said.
The shares rose 1.1 percent to $25.44 yesterday in New York. They had gained 79 percent this year through yesterday, compared with a 16 percent increase for the Standard & Poor’s 500 Index.
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