HP Axes Global Operations in Realignment

Hewlett-Packard said Tuesday it will dissolve its Global Operations organization and delegate the group’s activities to the company’s three main business groups as part of an ongoing companywide restructuring.

HP’s Imaging and Printing Group (IPG), Personal Systems Group (PSG) and Technology Solutions Group (TSG) now are responsible for supply-chain, procurement, logistics, order-fulfillment and marketing functions—such as HP.com and CRM—that once were a part of Global Operations.

Specifically, companywide supply-chain operations and global procurement services are now the responsibility of PSG, while worldwide logistics and strategy planning and modeling activities will reside in IPG, said Alexa Hanes, an HP spokeswoman. IPG also is responsible for Internet and marketing services and content management, which includes HP.com. The realignment puts TSG in charge of equipment management, worldwide and regional sales operations, and CRM functions.

Tuesday’s move is part of an effort HP began in July 2005 to simplify the company’s structure and reduce costs. At the time, HP said there would be about 15,300 layoffs due to the restructuring. The company also killed its Customer Solutions Group and moved those salespeople into the product groups they were serving at the time.

The entire restructuring, which is expected to be complete by the end of fiscal 2006 on Oct. 31, will improve HP’s profitability through US$1.9 billion in annual cost savings, the company has said.

Hanes said some workers may be let go as part of Tuesday’s realignment, but the company has not made any final decisions. If there are layoffs, they will be part of the 15,300 already announced by the company, she added.

-Elizabeth Montalbano, IDG News Service (San Francisco Bureau)

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