Key Highlights :
Global technology brand Lenovo has reportedly started laying off employees, as its PC business suffers significantly amid economic downturn. According to a report in CRN, the job cuts at Levono are “part of a roughly $115 million cost-cutting plan”. Lenovo CEO Yang Yuanqing had informed in February about a coming “workforce adjustment” as part of a broader reduction in spending.
The company had about 75,000 employees at the end of its 2022 fiscal year. “Like our CEO Yuanqing Yang said at our most recent quarterly earnings announcement, we are reducing operational expenses and making workforce adjustments where necessary and appropriate,” a company spokesperson said in a statement. “We continue to invest in the areas that accelerate growth and the overall transformation of the company,” the spokesperson told WRAL TechWire.
A “severe downturn” in the PC and smartphone markets caused the company’s revenue to drop 24 per cent (year-on-year) to $15.3 billion and net income to $437 million in the quarter ended December 31. The company had hinted at the job cuts in future as part of the overall cost reduction. Lenovo CFO Wong Wai Ming had blamed the downturn on a “confluence of global economic challenges and dynamic shifts in market demand”.
In the March quarter (Q1 2023), weak demand, excess inventory and a worsening macroeconomic climate resulted in the global shipments of traditional PCs recording 56.9 million, a huge 29 per cent drop compared to the same quarter last year, according to the International Data Corporation (IDC). Lenovo led the global PC market with 22.4 per cent market share, followed by HP Inc at 21.1 per cent and Dell Technologies at 16.7 per cent.
According to the report, the pause in growth and demand is also giving the supply chain some room to make changes as many factories begin to explore production options outside China. If recession in key markets drags into next year, recovery could be a slog.
The economic downturn has taken its toll on many industries and Lenovo is no exception. The global technology giant has reportedly begun laying off employees as its PC business takes a beating. This is part of a $115 million cost-cutting plan that CEO Yang Yuanqing had informed about in February.
The company had about 75,000 employees at the end of its 2022 fiscal year and is now reducing operational expenses and making workforce adjustments where necessary. The “severe downturn” in the PC and smartphone markets caused the company’s revenue to drop 24 per cent (year-on-year) to $15.3 billion and net income to $437 million in the quarter ended December 31.
In the March quarter (Q1 2023), weak demand, excess inventory and a worsening macroeconomic climate resulted in the global shipments of traditional PCs recording 56.9 million, a huge 29 per cent drop compared to the same quarter last year, according to the International Data Corporation (IDC). Lenovo led the global PC market with 22.4 per cent market share, followed by HP Inc at 21.1 per cent and Dell Technologies at 16.7 per cent.
The pause in growth and demand is also giving the supply chain some room to make changes as many factories begin to explore production options outside China. While Lenovo is taking steps to reduce costs and adjust its workforce, the company is also continuing to invest in areas that will accelerate growth and the overall transformation of the company.
The economic downturn has been hard on many industries and Lenovo is no exception. The global technology giant has reportedly started laying off employees as its PC business takes a beating. This is part of a $115 million cost-cutting plan that CEO Yang Yuanqing had informed about in February. The company had about 75,000 employees at the end of its 2022 fiscal year and is now reducing operational expenses and making workforce adjustments where necessary.
The “severe downturn” in the PC and smartphone markets caused the company’s revenue to drop 24 per cent (year-on-year) to $15.3 billion and net income to $437 million in the quarter ended December 31. In the March quarter (Q1 2023), weak demand, excess inventory and a worsening macroeconomic climate resulted in the global shipments of traditional PCs recording 56.9 million, a huge 29 per cent drop compared to the same quarter last year, according to the International Data Corporation (IDC). Lenovo led the global PC market with 22.4 per cent market share, followed by HP Inc at 21.1 per cent and Dell Technologies at 16.7 per cent.
The pause in growth and demand is also giving the supply chain some room to make changes as many factories begin to explore production options outside China. While Lenovo is taking steps to reduce costs and adjust its workforce, the company is also continuing to invest in areas that will accelerate growth and the overall transformation of the company.
Lenovo is not the only company that has been affected by the economic downturn. Many other companies have had to make changes to their operations and workforce due to the current situation. It remains to be seen how the company will be able to cope with the situation in the long run. But, for now, Lenovo is taking steps to reduce costs and adjust its workforce in order to stay afloat.