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Lenovo to cut 3,200 jobs after Q1’s “severe challenges”

Lenovo has announced that it’s to cut as many as 3,200 jobs to boost efficiency following a challenging first quarter.

By its own admission, the world’s biggest PC maker posted “solid results” for Q1. This included quarterly revenue of $10.7 billion (£6.85 billion), which represents a 3 per cent increase year-on-year.

However, it wasn’t all rosy for the Chinese company. Pre-tax income decreased 80 per cent year-on-year to $52 million (£33 million), while net income dropped 51 per cent to $105 million (£67 million).

Lenovo admitted that there remain “severe challenges in its main markets”, largely in the form of large declines in the global PC and tablet markets. There’s also the matter of increased smartphone competition in its native China.

This has led Lenovo chairman and CEO Yuanqing Yang to send an email to employees outlining drastic measures aimed at reducing expenses by $650 million in the second half of 2015. It also hopes to save $1.35 billion annually.

This will include shedding around 3,200 employees, which represents roughly 5 per cent of Lenovo’s total global workforce.

The company has also revealed that it will restructure its mobile business group, which includes Motorola. This will mean “a much simpler, more streamlined product portfolio with a reduced number of clearly differentiated models.”

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The company also aims to increase its share of the PC market from 20 per cent to 30 per cent, and to reposition its enterprise business.

“All changes will be completed ASAP,” says Yang.

If that’s what “solid” financial results get you, we’d hate to see a bad Lenovo quarter.

Next, find out what we thought of rival product the Dell XPS 13:

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