HP Decides to Retain PC Business

Packard Co. (NYSE:HPQ) announced on Thursday that it will not be spinning off its $40. 7 billion PC business, which was earlier made public by the ex-CEO of HP, Leo Apothekar.

After doing a fresh round of evaluations relating to the PC business, the company found the move to be just too costly. Meg Whitman, the Chief Executive of HP, who replaced Apothekar after the board fired him, said that the strategic economical and operational impact of splitting the PC business was evaluated by the company. She added, retaining the PC business is for the benefit of the consumers and partners, and also for the employees and for the shareholders.

The fresh strategic move marks the first major decision taken by Ms. Whitman after taking the top seat in HP. It took her five weeks to evaluate the split of the company and take this decision. Ms Whitman, whose run went in vain to become the California Governor after she served as the CEO of the e-commerce giant eBay, was named CEO of HP in September replacing Leo Apothekar, who was fired of his services from the company after developing problems with the company’s board.

Ms. Whitman supported the recent proposed decisions at HP which also included the acquisition of $10.billion worth Autonomy Corp, which HP took over earlier this month. However she said that she would also want to conduct her own analysis.

The decisions resulted in a 20 percent decline in HP’s stock price and wails of protests by some corporate customers. HP’S stock is still down by 36 percent for the year, compared to 3 percent gain. The company’s stocks on the New York Stock Exchange rose 4.8 percent to $26.99, and increased slightly in post market trading following the company’s announcement.

According to a source familiar with the ongoing matter said that HP will be shutting down its webOS division, which was acquired in April 2010 for $1.2 billion when it bought Palm, and thereby fire the staff there or probably shift them elsewhere within the company. This decision was also taken by Apothekar during his brief tenure at HP, after the WebOS based devices failed to compete against Apple and Google based operating systems. The shutdown of the WebOS division could mean layoffs of about 500 jobs as the business that created a short lived Touchpad and smart phones is closed.

No such statement relating the webOS group was made by HP, however top level staffs have been leaving and internal HP sources said that staff within the group expects the coming up closure. HP has already been affected with loses in the webOS division, with Richard Kerris resigning as the vice president of webOS for HP, earlier this week.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.