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.
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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.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)