After drama, HP to keep its PC business after all

New CEO Meg Whitman has reversed her predecessor's decision to spin out or sell its computer business

Hewlett-Packard isn't going out of the PC business after all. Today, CEO Meg Whitman announced the company would continue to make and sell PCs, reversing a decision made by her predecessor Léo Apotheker in August -- a decision that riled investors and employees and led to his ouster in late September. Since the August announcement, HP's future has been repeatedly questioned, as has the competence of its senior management. The appointment of board member Whitman as CEO added to the criticisms.

After assuming the CEO role, Whitman promised to assess the PC business's future quickly, to try to end the hand-wringing by employees, shareholders, and the press. A month later, she delivered on that promise.

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"HP objectively evaluated the strategic, financial, and operational impact of spinning off PSG [Personal Systems Group]. 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 is committed to PSG, and together we are stronger."

"We intend to make the leading PC business in the world even better," said Todd Bradley, the head of PSG who had expressed interest in running it as a separate company if it were spun off.

HP did not reverse its decision to kill its WebOS smartphone and tablet business, which Apotheker did when he announced the PC business might be sold or spun out as its own company. HP has retained the WebOS software and is looking for ways to use it in other HP products, such as printers.

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