Lenovo Eliminating 1,400 Jobs

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

Related stories:

Microsoft to Support Emerging Chinese Document Format
Microsoft will announce May 21 plans to create a project to develop an open-source translator project between China's Unified Office Format and the Ecma Open XML File Formats, which are closely tied to Microsoft Office.
Lenovo Takes R-Series Wide
The company's first two Centrino Duo laptops include the first widescreen 14-inch R-Series ThinkPad and an updated small-business notebook.
Shareholders Want a Greener Apple
In a filing with the SEC, a group of investors asks Apple to adopt better environmental standards for the manufacturing of the Mac.
A Laptop Circle of Trust
Laptop computers are quickly becoming standard-issue equipment for enterprise workforces across the globe, but the productivity gained from this added mobility comes at a price: increased exposure to theft, loss and damage.
China, India winning the piracy war
Although software piracy refuses to go down globally and even continues to thrive in the rest of Asia, efforts by China and India to fight their computer users' desire for using stolen software are yielding positive results in terms of marginal but significant decline.
Computer sales not leading to profits
For computer manufacturers, the latest report confirming a surge in global demand for personal computers should have been heartening, but one of the biggest beneficiaries of the seemingly insatiable appetite worldwide for new PCs said it was slashing its workforce in order to retain its competitive edge.
Powerful New Intel Server Platforms Feature Array Of Enterprise-Class Innovations
Intel Corporation today unveiled a new generation of Intel® Xeon™ processor-based server platforms. The platforms are based on an array of new performance-enhancing technologies and capabilities that collectively help to better address the evolving needs of enterprise computing.
Dell unveils new PCs targeting emerging markets
(AP) -- Dell Inc. unveiled four low-cost computer models for China, India and other emerging economies Wednesday in a new bid to tap the potential of high-growth markets outside the United States.

News discussion:

Technology news