Lenovo to cut 3,200 jobs to revive market share

After reporting 51 percent drop in its first quarter profit, Lenovo has decided to lay off 3,200 staffers, which is roughly five percent of the company’s entire workforce. The Chinese company is hoping to save around $1.35 billion annually from job cuts.

“Last quarter, we faced perhaps the toughest market environment in recent years. To build long term, sustainable growth, we must take proactive and decisive actions in every part of the businesses,” said Lenovo CEO and Chairman Yuanqing Yang in a statement.

The world’s largest PC maker is suffering from poor financial health due to a significant decline in global demand for PCs and tough competition from Chinese smartphone makers. Its shares fell by nine percent on Thursday as it reported a quarterly revenue of $10.7 billion, which was far below the expectations.

Last year, Lenovo bought Motorola for $2.91 billion from Google Inc, and the subsidiary has seen a 31 percent decline in sales. Overall, the Chinese company’s mobile division has lost $300 million, but Yuanqing is confident that streamlining its smartphone businesses will prove to be beneficial for Lenovo in the long term.

“I still believe mobile is a new business we must win. I still believe this acquisition (Motorola) was the right decision…Except Apple and Samsung there is no third strong (global) player. I believe that will be Lenovo,” he said.

Via: Reuters

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