HP to keep PC division

HP is keeping its PC business after all.

In August, Hewlett-Packard, the world's largest computer maker, announced that it was considering spinning of its personal computer business into a separate company. But in a statement on Thursday, the company announced that the plan had been nixed. 

“HP objectively evaluated the strategic, financial and operational impact of spinning off [HP's 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,” HP President and CEO Meg Whitman said. “HP is committed to PSG, and together we are stronger.”

HP's chief financial officer, Cathie Lesjak, told The Wall Street Journal in an interview that spinning of the PC side of the business would have cost the company $1.5 billion, and other factors related to the move could have cost $1 billion a year going forward. 

"It slowly but surely became very clear that the math just wasn't going to work on this one," Lesjak said.

Reuters called Thursday's announcement the "latest flip-flop" by HP. According to Reuters the company has been struggling in the PC market, where revenues are high but margins are low.

The decision to look into spinning of the PC business was made in August under then-CEO Leo Apotheker. Whitman, the former CEO of eBay and a 2010 gubernatorial candidate in California, was named HP's CEO in September.