Global technology brand Lenovo has reportedly started laying off employees as its PC business takes a hit amid the economic slowdown.
According to a report in CRN, the job cuts at Levono are “part of an approximately $115 million cost-cutting plan”.
Lenovo CEO Yang Yuanqing reported in February about “workforce adjustments” coming as part of a broader reduction in spending. The company will have approximately 75,000 employees at the end of the 2022 fiscal year.
“As stated by our CEO Yuanqing Yang in our most recent quarterly earnings announcement, we are reducing operating expenses and making necessary and appropriate workforce adjustments,” a company spokesperson said in a statement.
“We continue to invest in areas that drive growth and the overall transformation of the company,” the spokesperson told WRAL TechWire.
The company’s revenue fell 24 percent (year-on-year) to $15.3 billion and net income to $437 million in the quarter ended December 31 due to a “severe decline” in the PC and smartphone markets.
The company had hinted at future job cuts as part of overall cost-cutting.
Lenovo CFO Wong Yi Ming blamed the slowdown on “a confluence of global economic challenges and dynamic changes in market demand”.
In the March quarter (Q1 2023), weak demand, excess inventory and a worsening macroeconomic climate resulted in global shipments of traditional PCs at a record 56.9 million, a massive 29 percent decline from the same quarter last year. Corporation (IDC).
Lenovo leads the global PC market with 22.4 percent market share, followed by HP Inc at 21.1 percent and Dell Technologies at 16.7 percent.
According to the report, the stagnation in growth and demand is also giving the supply chain some wiggle room as many factories look for production options outside China.
If the slowdown in major markets stretches into next year, the recovery could be slow.
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