Hewlett-Packard reversed course on Thursday and said it will keep its personal computer division after reviewing a proposal by its former chief executive to spin off the unit.

"HP objectively evaluated the strategic, financial and operational impact of spinning off PSG (the Personal Systems Group)," HP chief executive Meg Whitman said in a statement.

"It's clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees," Whitman said. "HP is committed to PSG, and together we are stronger."

Whitman took over as HP's president and chief executive on September 22, replacing Leo Apotheker, who was ousted by the board of directors after less than a year at the helm of the world's biggest computer maker.

Spinning off the PC division had been proposed by Apotheker, a veteran of German business software giant SAP, as part of a shift towards software and services for businesses.

The low-margin PC market has been flat amid an astronomical increase in powerful smartphones and the arrival of hot-selling tablet computers such as Apple's iPad.

In its statement Thursday, HP said the PC unit would be "a key component of HP's strategy to deliver higher value, lasting relationships with consumers, small- and medium-sized businesses and enterprise customers."

"As part of HP, PSG will continue to give customers and partners the advantages of product innovation and global scale across the industry's broadest portfolio of PCs, workstations and more," said Todd Bradley, the executive vice president of HP's Personal Systems Group.

"We intend to make the leading PC business in the world even better," he added.

HP shares were up 0.59 percent at $27.15 in after-hours trading after gaining 4.82 percent on Wall Street on Thursday.

Shares in the Palo Alto, California-based HP plunged 20 percent the day after Apotheker announced the possible spin off of the PC unit, and lost 40 percent of their value during his tenure.

As part of his strategic shift, Apotheker also announced the $10.24 billion purchase of British enterprise software company Autonomy and a decision to stop production of the TouchPad tablet computer, HP's rival to the iPad.

HP's acquisition of Autonomy closed earlier this month.