Hewlett-Packard Splits Power Between 2 Chiefs

Hewlett-Packard Co., searching for a way out of a profit slump, said Friday that it has created a “chief executive office” in which President and Chief Executive John A. Young will share responsibility with Chief Operating Officer Dean O. Morton.

The Palo Alto-based computer and test equipment company also announced a broad organizational reshuffling that consolidates its computer-related operations into two divisions: a computer systems group for mid-size computer systems and engineering workstations, and a computer products group for personal computers and peripherals.

Young, 58, who declared that he will be “somewhat more involved in operations,” said the objective of the realignment was to “flatten” the organizational hierarchy. He denied that there was any diminution of his own responsibilities. “Quite the contrary,” he said.

Young also noted that Morton, as chief operating officer, had been running the computer side of Hewlett-Packard’s business, and the two new computer units will continue to report to Morton, also 58.

Hewlett-Packard has been struggling with weak demand for traditional minicomputers, which has shifted the company’s business toward less profitable products such as printers and personal computers. In addition, H-P has had trouble digesting Apollo Computer, a vendor of engineering workstations that it purchased last year in an effort to stay abreast of the shift toward desktop computers.

Timothy McCollum, an analyst with Dean Witter Reynolds, said the company moved into the right product areas at the right time, but “the implementation has not been very good.” He called Friday’s realignment a positive step that resulted from the fact that “upper management and the board have been frustrated with the profit performance.”

McCollum noted that Douglas C. Chance, who had previously headed the minicomputer operation, appeared to have been pushed aside in the shake-up; he is now on a “special assignment related to transition planning.” Lewis E. Platt will head the new computer systems organization, and Richard A. Hackborn will head the computer products group. Both are veteran H-P executives.