Lenovo cuts 3,200 jobs after profit halves

Lenovo is cutting 3,200 jobs as the company posts a half-year-old profit. The layoffs will take place outside the company’s factories and affect a tenth of the total workforce.

Although Lenovo says it has delivered “good results in a difficult market”, the company is still going to cut spending because the numbers did not live up to expectations. The company is therefore carrying out a reorganization that should yield 1.4 billion dollars – converted 1.2 billion euros – per year in savings.

As a result of the reorganization, 5 percent of Lenovo’s 60,000 employees will lose their jobs. This concerns a total of 3200 jobs of people who all work outside the production departments. This concerns 10 percent of the jobs outside the factories.

Lenovo had revenue of $10.7 billion in the quarter, up 3 percent from a year earlier. Operating profit, a good indicator of a company’s financial health, however, fell from 291 to 96 million; a decrease of 67 percent.

Especially Lenovo part Motorola had a hard time. The number of smartphones delivered fell by 30 percent. The number of PCs delivered also fell by 7 percent to 13.5 million. However, that decline is less than the contraction of the entire PC market, Lenovo claims. In the field of tablets, Lenovo reached 2.5 million units, which it claims is the third largest worldwide.