HP Changes Course, Decides to Keep PC Division

In another dramatic corporate turnaround, HP announced Thursday that it had changed its mind about spinning off its PC division, reversing a decision laid out just two months ago by the company’s previous CEO. The decision means that HP will remain in the business of making computers.

HP Flip Flops

It was HP’s new CEO, Meg Whitman, who made Thursday’s announcement that the Personal Systems Group would continue to be part of HP and help make the company stronger. “HP objectively evaluated the strategic, financial and operational impact of spinning off PSG. It’s clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees,” Ms. Whitman said.

That’s quite a change from the announcement then-CEO Leo Apotheker made in August when he declared that HP would rid itself of this division. Mr. Apotheker had been CEO of HP for only 11 months before he was ousted over the controversy created after that proclamation. In September, Mr. Apothekar was ousted and replaced by Ms. Whitman.

HP is the number one manufacturer of personal computers and the computer division within the company had revenues of US$40.7 billion in fiscal 2010. The company seeks to strengthen that position, and, according to Todd Bradley, executive vice president, Personal Systems Group, they “intend to make the leading PC business in the world even better.”