Lenova has announced plans to lay off 2500 employees as it seeks to redeploy its resources in the challenging PC market and continuing global economic downturn.

The workforce reduction includes management and executive positions, as well as support and staff functions, such as finance, human resources, and marketing.

In addition to the job cuts, equaling approximately 11% of the OEM's worldwide employee base, Lenovo plans to reduce executive compensation by 30% to 50%, including merit pay and long-term incentives, as well as any performance payments for the coming year. Similar compensation-reduction actions have been taken at several electronics industry companies, including Motorola.

“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,” said Yang Yuanqing, Lenovo’s chairman, in a statement. “We are taking these actions now to ensure that in an uncertain economy, our business operates as efficiently and effectively as possible, and continues to grow in the future.”

From the restructuring actions, Lenovo expects to realize savings of approximately $300 million in the 2009/2010 fiscal year, ending March 31, 2010. The company anticipates taking a pre-tax restructuring charge of approximately $150 million, most of which will be taken in its fiscal Q4, ending March 31, 2009. Approximately $24 million of the restructuring charges were booked in Lenovo’s fiscal Q2, ended September 30, 2008. The company also expects to report a loss for its fiscal Q3, ended December 31, 2008.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved