Lenovo Eliminating 1,400 Jobs

April 20, 2007

The PC maker says it will save $100 million this fiscal year by eliminating some jobs and moving other positions to emerging markets.

Lenovo Group, the world's third largest PC vendor, is eliminating 1,400 jobs worldwide, a move executives said will help save the company $100 million during this fiscal year.

In a statement released April 19, Lenovo CEO William J. Amelio said that the cuts were necessary in order to grow the company, reduce expenses and keep the cost of its desktops and notebooks down.

"We must deliver the world's best-engineered PCs, offer our customers an unrivaled ownership experience, and grow faster and more profitably than the rest of the industry," Amelio said. "This means we must make our organization more efficient by reducing expenses."

Lenovo, which is based in Raleigh, N.C., will eliminate jobs in North America, Asia, Europe, Africa and the Middle East. Of those 1,400 positions, 750 will be moved to emerging markets that are closer to the company's suppliers and its manufacturing facilities.

In the next calendar year, the company will then eliminate 650 jobs altogether. Lenovo expects to save about $100 million dollars in the fiscal year that started April 1. That money, Amelio said, will then be reinvested in the company's operations.

Lenovo also announced plans to streamline its supply chain, as well as its sales and marketing organizations, in order to save additional dollars.

Although one of the world's largest PC providers in China and some other emerging markets, such as India, Lenovo still ranks behind Hewlett-Packard and Dell in terms of shipments and market share. In the latest Gartner study, Lenovo ranked just behind Acer in fourth place among PC vendors, although a similar study by IDC found the two companies tied for third in terms of market share and shipments.

Despite its struggles, Lenovo did manage double-digit growth in the number of PCs it shipped in the first quarter of this year. According to Gartner, the company's shipments increased more than 16 percent compared with the first quarter of 2006.

On May 2, 2005, Lenovo completed the $1.75 billion purchase of IBM's PC business, but the company has struggled to create a presence for its own brand of computers in North America. The ThinkPad brand of notebooks and desktops, however, still remains a strong competitor within the enterprise space.

Copyright 2007 by Ziff Davis Media, Distributed by United Press International

Explore further: Taiwan's HTC stocks plunge to lowest in decade

Related Stories

HP revenue inches up after years of decline

August 20, 2014

Hewlett-Packard on Wednesday reported that its quarterly revenue rose for the first time in three years, nudged by improved computer sales everywhere except Russia and China.

Apps now key to small-business savings

August 21, 2012

Theater design consultant Joshua Allen doesn't routinely travel the country with a laptop for work anymore. The Apple iPad has become Allen's go-to traveling companion. "At first I was hesitant," he said. But then, "My bag ...

Recommended for you

Toyota promises better mileage and ride with Prius hybrid

October 13, 2015

Toyota Motor Corp. released details for its fourth-generation Prius on Tuesday, promising that improvements in the battery, engine, wind resistance and weight mean better mileage for the world's top-selling hybrid car.

Facebook to test mobile app shopping tab

October 12, 2015

Facebook said Monday that it will begin testing a shopping tab for its mobile app as it works to ramp up advertising and online commerce offerings.


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.