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Dell to Divide Commercial Business Group

Reuters
Thursday, 11 Jan 2007 | 3:09 AM ET

Dell said on Wednesday that the head of its commercial business group would retire in March and the No. 2 PC maker plans to split that unit into two as it streamlines its business.

Joe Marengi, 51, will retire at the end of March and the business unit he runs -- comprised of storage gear, personal computers and computer servers -- would be divided and headed by two of Marengi's direct reports, a Dell spokesman said.

Marengi's retirement and the division of the commercial business group comes as Dell has endured the departure of senior executive talent and slowing revenue growth amid falling prices for its products, as well as stiffer competition from longtime rival Hewlett-Packard.

One of the new groups is called the public business group that will focus on the education, health and government businesses, said Dell spokesman Bob Pearson.

The other, the commercial business unit, will target Dell's bread-and-butter large corporate customers. About 85 percent of Dell's revenue comes from its commercial business, with the remainder coming from sales to consumers.

"As we realign, we want to stay really focused on our customers," Pearson said.

Last month, Dell said that longtime chief financial officer James Schneider was leaving the Round Rock, Texas-based company and would be replaced by former American Airlines chief and Dell board member Donald Carty.

The executive departure and concomitant unit division was first reported by the Wall Street Journal.

The Dell spokesman said that none of the three was immediately available for comment.

Shares of Dell rose 42 cents, or 1.6%, to close at $27.26 on Wednesday.

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