He probably wouldn’t want it portrayed as such, but HP CEO Mark Hurd is considering a move that his predecessor, aspiring politician Carly Fiorina, made several years ago.
Hurd is considering merging his company’s printer and PC businesses, putting them under the purview of Todd Bradley, chief of the company’s PC group. Fiorina combined the two businesses back in 2005, before she was ousted in a palace (well, boardroom) coup.
When Hurd took the reins at HP, he separated the businesses. Now he’s on the cusp of bringing them back together, though for different reasons than Fiorina had when she combined them.
Back then, the printer unit was the redoubtable cash cow and the PC unit was struggling. While the printer business hasn’t fallen off the face of the earth — it’s still a huge contributor to HP’s earnings — its growth has stagnated. Meanwhile, the PC group has done relatively well, taking share from Dell, competing effectively in business and consumer segments, and doing particularly well in higher-growth notebooks.
Some think Hurd would like to transmit some of that PC mojo to the printer group — hence the mooted change. But one has to keep in mind that Hurd is a relentless cost cutter. Before joining HP, his raison d’etre was his merciless focus on lean and mean operations. He brought that spartan philosophy to HP, and he’s been fervently pursuing reductions in operating expenditures ever since he got there.
I suspect the reasoning behind this move, should it occur, is not predicated on a strategic stroke of visionary brilliance visited upon Hurd during a spell of intense meditation. No, I think this has been driven primarily, if not exclusively, by methodically calculated cost-cutting considerations.
Hurd hired Bradley because he liked the severe cut of his jib. He probably believes his man is eminently suited to bring discipline and order — not to mention scores of potential employment redundancies — to a printer business run by an old-school HP veteran, Vyomesh “V.J.” Joshi, who’s been with the company since 1980.
There’s no growth strategy behind this move, but you will find an obsessive emphasis on reducing costs to boost the bottom line. Hurd is continuing what he sees as his mission to remake HP in his own image.