The cost of spinning off the unit would have amounted to US$1.5 billion in one-time costs and additional payments at later dates, said Tony Prophet, senior vice president of operations at HP's Personal Systems Group (PSG) unit, which deals in PCs, smartphones and tablets.

"As the analysis unfolded, it became clear the costs were much more significant than any potential benefit," Prophet said.

HP on Thursday said it had decided to keep its PC division after flirting with either selling or spinning it off -- a plan that had been put in motion by former CEO Leo Apotheker. HP was exploring alternatives for the low-margin PSG business in order to concentrate on more profitable business areas such as enterprise software, services and hardware.

Keeping the PSG within HP is "right for customers and partners, right for shareholders, and right for employees," Meg Whitman, HP's president and CEO, said in a statement on Thursday.

The company had close to 100 people -- executives, customers and legal advisors -- working to evaluate whether to retain or spin-off the PC division, Prophet said. Other factors in the decision to retain the unit were customers' wishes and the component purchasing power provided by the PC unit, said Prophet.