Arik Hesseldahl

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Exclusive: The HP Reorg Internal Memo

Now that Hewlett-Packard CEO Meg Whitman has ordered the company’s printing group and personal computers group to recombine — undoing the separation forced upon them in 2005 — the group’s boss, Todd Bradley, has wasted no time in putting his team in place.

Below is an internal HP memo sent to company employees on Friday. In it, Bradley names every key executive who will be responsible for running the new Printing and Personal Systems Group (PPS), which will essentially replace the existing Personal Systems Group (PSG) and the Imaging and Printing Group (IPG).

As previously reported, this business unit will be, by at least one key measure, the new big dog at HP. Based on 2011 sales, the combined group is responsible for $65 billion — more than 51 percent of HP’s overall sales. Yet the two groups are flailing: HP’s PC business is under attack, if for no other reason than the fact that prior CEO Léo Apotheker sought to spin it out and thus created some damaging uncertainty for the group’s longer-term prospects. Then there’s the little matter of Apple’s iPad and other tablets, a market segment where HP has no presence to speak of as yet.

The printing business, on the other hand, was once the financial engine that kept other bits of HP afloat. While printers are generally sold at a loss, ink cartridges and other supplies have been sold at much higher profit margins than other goods. The problem is that people are printing a lot less than they used to — and are showing the photos that they once printed on iPads and tablets, instead.

Anyway, Bradley’s team is listed in detail, below:

SUBJECT/ Organization announcement

TO/ All Printing and Personal Systems employees

March 23, 2012

HP Restricted – For Internal Use Only

As Meg said this week, this realignment is designed to make it easier for you to service customers, sell HP and make it easier for you to get work done.

In Printing and Personal Systems, this mission will be our passion and our focus, and we will lead from a position of strength. We are the global leader in printing and personal systems, and we have touched hundreds of millions of lives along the way. Now, as one team, we can accelerate our path to profitable growth while we deliver the best experience to more people.

Together, we are a $65 billion powerhouse with tens of thousands of employees around the world. But we haven’t reached our full potential. To accelerate our progress, we must act swiftly.

With this in mind, I am pleased to announce the best leadership team in the industry.

Global Business Units

Each of our four GBUs is accountable for product development and long term business results, working closely with the region and function teams. This begins with understanding customer insights, designing quality into our products upfront and delivering innovation that really matters to customers. These teams will work to provide a “better together” customer experience. The four GBUs are:

· Personal Computers led by James Mouton

· Inkjet and Web Solutions led by Stephen Nigro

· LaserJet and Enterprise Solutions led by Ron Coughlin. Mike Salfity and the platform development team will be hosted within Ron’s organization.

· Graphics Solutions led by Chris Morgan

Regions

To reach our potential we need to make it easier for our customers to buy from us, and for our sales teams to serve them. Together as one team, we have a clear opportunity to simplify and improve how we work with channel partners, drive market preference and expand our sales coverage.

Given the size and scope of PPS in the U.S., I have decided to create a new role within the traditional Americas region structure that is focused exclusively on our U.S. business. In all regions, collaboration is key during this transition to ensure we deliver on the fiscal year.

· Americas led by John Solomon. Within the Americas, Lynn Pendergrass will lead the U.S. Stephen DiFranco’s role will be announced at a later date. Meanwhile, Stephen will work with John and Lynn to ensure an orderly transition.

· Europe, Middle East and Africa led by Eric Cador. Bill DeLacy’s role will be announced at a later date. Meanwhile, Bill will work with Eric to ensure an orderly transition.

· Asia Pacific and Japan led by Dion Weisler. John Solomon will collaborate with Dion during the transition.

PPS Global Functions

Our functions are also closely aligning to help us will drive a more integrated and simplified approach to how we work. Again, collaboration will be key during the transition.

· Customer Service & Support led by Enrique Lores. Bruce Dahlgren will report into Enrique, leading Managed Enterprise Solutions.

· Operations led by Tony Prophet; Reinhard Winkler’s role will be announced at a later date. Meanwhile, Reinhard will work with Tony to ensure an orderly transition.

· Sales Operations and Project Management Office led by Joshua Brenkel

· EVP executive assistants are Denise Polanco and Susan Bergstresser

HP Global Functions

In the spirit of “One HP,” the following leaders are assigned to PPS, reporting to the respective EVP of their function.

· Finance led by Jon Flaxman, reporting to Cathie Lesjak. JJ Charhon, as previously announced, will lead finance for Enterprise Services.

· Marketing led by Eric Keshin, reporting to Marty Homlish; Manny Kostas’ role will be announced at a later date. Meanwhile, Manny and Eric will work together to ensure an orderly transition, including working with Henry Gomez to identify the communications professionals who will move to Global Communications.

· Human Resources led by Teri Eyre; Nancy Phillips’ role will be announced at a later date. Meanwhile, Nancy will work with Teri to ensure an orderly transition. Both Teri and Nancy report to Tracy Keogh, HR.

· Legal led by Gabriel Buigas, reporting to David Healy

These appointments are effective May 1. In addition to welcoming this team to their new and expanded roles, please join me in recognizing the remarkable contributions of all of the leaders of the former PSG and IPG organizations.

My team and I will provide clarity on the rest of the management team as quickly as we can after a thoughtful talent review. We intend to announce L3 leaders by May 1, L4 leaders by June 1, and to have all roles in the new organization clarified by August 1.* I will also hold monthly communication sessions to keep you up to date on what’s happening and ensure your questions and concerns are heard.

This is a great deal of change for each of us. But we must meet commitments to our customers, to our partners and to each other. The true strength of our organization cannot be captured in a simple organization chart — it is defined by the people who make HP work.

Thank you in advance for helping to drive PPS and HP forward.

Todd

*For those countries that require consultation with works councils or other employee representatives, this is not intended to provide country-specific information and in no way reflects that final decisions have been made at a local level. With respect to such countries, final decisions are subject to prior consultation with works councils and other employee representatives, and compliance with local law.


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