Main­land’s Len­ovo to cut over 3,000 jobs as net profit halves

The China Post - - WORLD BUSINESS -

Main­land Chi­nese com­puter gi­ant Len­ovo said Thurs­day it would cut more than 3,000 jobs as net profit for its first quar­ter fell by more than 50 per­cent.

The world’s big­gest per­sonal com­puter maker also saw rev­enues miss an­a­lysts’ fore­casts in what chair­man and CEO Yuanqing Yang de­scribed as the “tough­est mar­ket en­vi­ron­ment in re­cent years.”

Net profit dropped 51 per­cent to US$105 mil­lion for the first three months to June 30 — which the firm takes as its first quar­ter — com­pared to US$214 mil­lion for the same pe­riod last year.

Pre-tax profit for the first quar­ter also plunged by 80 per­cent.

Rev­enue grew three per­cent to US$10.7 bil­lion, but fell short of Bloomberg an­a­lysts’ av­er­age esti- mates of US$11.5 bil­lion.

In a state­ment to the Hong Kong stock ex­change, Len­ovo said it would seek to slash costs by US$1.35 bil­lion an­nu­ally and cut 3,200 staff from its non­man­u­fac­tur­ing work­force — around five per­cent of its world­wide head­count.

It would also re­struc­ture mo­bile busi­ness.

“In the face of fi­nan­cial re­sults that did not meet ex­pec­ta­tions, Len­ovo is un­der­tak­ing broad, decisive ac­tions — in­clud­ing bet­ter align­ing its busi­nesses and sig­nif­i­cantly re­duc­ing costs,” the firm said in a state­ment.

Len­ovo shares traded in Hong Kong were down al­most seven per­cent in morn­ing trade at HK$ 7.88 ( US$ 1.02).

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