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HP Increases Accountability of Business Groups by Realigning Operations Functions

Wednesday, June 21, 2006

Press release from the issuing company

PALO ALTO, Calif.--June 20, 2006-- HP today announced a further step to enhance accountability and streamline operations within the company by integrating the activities carried out by its Global Operations organization directly into its business groups. The move will give the groups responsibility for supply chain, procurement, logistics, order-fulfillment and certain marketing functions, such as HP.com and customer relationship management. The company's three main business groups -- Imaging and Printing Group (IPG), Personal Systems Group (PSG) and Technology Solutions Group (TSG) -- will now have greater accountability over the full range of their operational activities. At the same time, each function that moves into the businesses will retain a company reach so that it retains maximum efficiency. For example, PSG will host central direct procurement and carry out procurement for goods used across the company. Similarly, IPG will host the worldwide logistics function and carry out companywide logistics procurement, freight cost management and customs operations. This realignment is part of HP's efforts announced in July 2005 to simplify the company's structure, reduce costs and bring a renewed focus on serving customers. These ongoing efforts will result in the overall elimination of 15,300 positions by end of fiscal year 2006 and are intended to streamline the company by restructuring support functions and improve accountability and executive focus through a simpler reporting structure with fewer management layers. "Under Gilles Bouchard's strong leadership, HP has transformed our operations on a global scale, increasing customer satisfaction and creating significant cost savings," said Mark Hurd, HP chief executive officer and president. "This realignment will enable us to build on this momentum while enhancing accountability and enabling greater focus and customization of operations based on the needs of our customer segments." The realignment of HP's Global Operations structure is expected to be completed in November 2006.




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