Lenovo announced on Jan. 8 it would cut about 2,500 jobs, roughly 11% of its worldwide workforce, after suffering losses due to the global economic crisis. The company, the world's fourth-biggest personal computer maker, said that the "resource redeployment plan" would help save $300 million in the financial year ending March 31, 2010.
The company said cuts would include management and executive positions.Executive compensation, including merit pay and long-term incentives, will be cut by between 30% and 50%, the group said.
Lenovo said in November last year that its net profit for the three months ending September 30 slumped 78% from a year earlier to $23.4 million. The firm had seen double-digit growth in profits until then.
That followed the company's report of a surge of more than 200% in the 2007-8 financial year, citing strong sales growth across the world.
Yang Yuanqing, Lenovo's board chairman, said: "Although the integration of the IBM PC business for the past three years was a success, our last quarter's performance did not meet our expectations. We are taking these actions now to ensure that in the uncertain economy, our business operates as efficiently and effectively as possible, and continues to grow in the future."
Although Lenovo said it had seen reduced demand around the world it specifically identified problems in China. "The slowing down in the Chinese economy... has also affected what has historically been a major market for the group," it said.
The company said it will also merge its operations in China, Asia Pacific, and Russia to increase efficiency. It will also continue to target new markets.
Copyright Agence France-Presse, 2009