Lenovo to shed 3,200 jobs globally
Print Edition
LENOVO Group Ltd yesterday announced plans to cut 3,200 jobs around the world, after reporting that its second-quarter net profit fell more than 50 percent year on year.
Yang Yuanqing, chief executive of the world’s largest personal computer manufacturer, said in a statement that the company was facing its “toughest market environment in recent years,” and needed to cut costs globally.
Lenovo’s net profit fell 51 percent in the April-June period to US$105 million, despite revenue for the quarter rising 3 percent to US$10.7 billion.
“Last quarter, we faced perhaps the toughest market environment in recent years, but we still achieved solid results,” Yang said.
The challenges included big declines in global PC and tablet markets, increasing competition in the Chinese smartphone market, macro-economic challenges in Brazil and Latin America, and large currency fluctuations, the statement said.
Lenovo shares fell more than 9 percent in Hong Kong yesterday to HK$7.70 (US$1), while the Hang Seng Index ended the day up 0.4 percent.
Revenue from its PC business in the second quarter fell 8 percent year on year to US$7.3 billion, the statement said.
“We will reduce costs in our PC business and increase efficiency in order to ... improve profitability,” Yang said.
The 3,200 people who will lose their jobs, most of whom work in non-manufacturing positions, represent about 5 percent of the company’s total workforce.
The move is expected to save Lenovo about US$650 million in the second half of this year, and about US$1.35 billion on an annual basis, it said.
Revenue in the second quarter from the company’s mobile business, which includes smartphone, tablets and smart TV, rose 33 percent year on year to US$2.1 billion, though the division posted a net loss of US$292 million after its US$290 million purchase of Motorola Mobility.
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