Decline in quarterly profits causes Lenovo to lay off 3,200 staff

By Scorpus ยท 4 replies
Aug 13, 2015
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  1. Declines in the global PC market and increased competition in the smartphone space are making life tough for Lenovo. The company has reported a significant drop in net income for the first quarter of their fiscal year, and as a result, they're looking to streamline their workforce in the near future.

    For Lenovo's first fiscal quarter ending June 30, 2015, the company reported revenue of $10.7 billion, which is a three percent increase on revenues reported in the same quarter last year. Unfortunately the news isn't as good for income, which decreased by a whopping 80 percent year-on-year to $52 million, while net income also declined by 51 percent to $105 million.

    To return to growth, Lenovo is undertaking some "realignment actions", the most significant of which is a reduction of the company's workforce. Lenovo says 3,200 people will be laid off in the process, which is 10% of the company's non-manufacturing headcount, and 5% of staff overall.

    This streamlining and restructuring will cost the company $600 million in the short term, with the aim to reduce expenses by $650 million in the second half of the year, and by $1.35 billion each year.

    The reduction in headcount isn't the only restructuring effort Lenovo is undertaking. The company will rejig their Mobile Business Group to "better leverage the complementary strengths of Lenovo and Motorola". This includes reducing the number of smartphone models produced by the company to streamline their product portfolio.

    The company is also hoping to achieve a 30 percent share in the PC market by becoming more efficient and by "better taking advantage of consolidation". Lenovo currently holds a worldwide market share of 20.6 percent, with a company-record-high share of 13 percent in the United States.

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  2. Skidmarksdeluxe

    Skidmarksdeluxe TS Evangelist Posts: 8,647   +3,274

    I'm not surprised. They haven't done themselves any favors with the negative press they've recently been getting for including spyware, crapware and bloatware on their laptops and by the looks of things they still haven't learned their lesson if the previous article is anything to go by.
    alabama man and amstech like this.
  3. I agree with Skidmarksdeluxe.
    The layoff should start with the highest positions; they were the decision makers that led to all the negativity. And they are obviously not bright..not even close to it, since it would be obvious to any regular Joe Shmo, that including spyware would lead to negative press and huge declines in business.
    alabama man likes this.
  4. MoeJoe

    MoeJoe TS Guru Posts: 711   +381

    Lenovo isn't even ready for the Windows 10 release date.
    Their system foundational drivers are f'd up and they didn't
    have a single pre-loaded system on any retail shelf.

    Sucks to suck.
  5. alabama man

    alabama man TS Maniac Posts: 375   +241

    Well the one who got the money for accepting the spyware is kinda smart, not a nice person if he ruins the company for it but heyyyy MONEYYY!!

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