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