HP announces U-turn to keep PC division after Whitman completes internal review

HP has reversed its decision to spin-off the company's PC division following an internal review by CEO Meg Whitman, who replaced form head Leo Apotheker in September.

The about-turn to retain its Personal Systems Group (PSG) reverses Apotheker's August announcement that HP would ditch its PC business and concentrate on software. Shareholders reacted badly to the plans, with Apotheker consequently stepping down.

"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," said Whitman in a statement.

HP's review found the division was deeply integrated across key operations such as supply chain, IT and procurement. It showed the cost to recreate these in a standalone company outweighed any benefits of separation.

HP's PSG division has total sales of $40bn per year - the largest revenues in the world for a manufacturer of personal computers, claimed the company.

Todd Bradley, executive vice-president of PSG at HP, said: "We intend to make the leading PC business in the world even better."

However, the company is not reversing its decision to ditch its Touchpad tablet range, also made in August.