Lenovo Is Laying Off 3,200 Staff After A Poor Quarter Of Business
Lenovo, the world’s largest PC maker and fifth largest smartphone firm, is laying off 3,200 employees as it bids to return to improved financial health following a disappointing last quarter of business.
The Chinese company confirmed in an announcement that the cuts will reduce overall headcount by five percent (or ten percent of its non-manufacturing staff) in a move that should trim its wage bill by an estimated $1.35 billion per year. The news emerged after Lenovo published its results, which saw operating profit sink by more than 50 percent year-on-year to reach $105 million.
Lenovo reported revenue of $10.7 billion, up three percent on the same period last year, but “significant declines” in demand for PCS worldwide, increased competition in China’s smartphone market — which is also, notably, shrinking — and “large currency fluctuations” in Latin America dragged the firm, and its Motorola subsidiary in particular, down.
“Last quarter, we faced perhaps the toughest market environment in recent years,” said Lenovo CEO and Chairman Yuanqing Yang in a statement. “To build long term, sustainable growth, we must take proactive and decisive actions in every part of the businesses.”
In addition to the layoffs, Lenovo will write off $300 million in unsold smartphones, and spend $600 million to restructure its smartphone businesses so that Motorola and Lenovo are more strategically aligned.
This latest earnings period has been pretty disastrous for a clutch of notable Android smartphone makers. HTC, which is now essentially worthless, outlined a new “streamlined” strategy after a $252 million loss. Over in Korea, LG’s sales dropped and Samsung’s growth slump continued, while, in Japan, Sony’s mobile business performed poorly once again, too.
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