Lenovo to reduce headcount by 3,200 worldwide

Citing a need to accelerate transformation across the company, Lenovo has announced a reduction in workforce of about 3,200 people in its worldwide operations.

Yuanqing Yang, chairman and CEO of Lenovo has announced in an email to all employees that this action would include 10% of non-manufacturing headcount and about 5% of the total population of around 60,000 people.

In the email, Yang mentioned that though the company has delivered solid results demonstrated in the earnings, growth has not been consistent across all business units.

While the core PC business remained strong, the two newer growth engines - mobile and enterprise - are still in the process of  integrating elements of the acquired businesses and building the business model, cost structure and competitive foundation.

As such, the company aims to reduce expenses by about $650 million in the second half of this year and about $1.35 billion on an annual basis as well as become more efficient.

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Apart from the job cuts, he announced four more initiatives to bring the company back to growth.

• Leverage the global sales force to create a faster, leaner business model in the Mobile business Group (MBG).
• Reposition the Enterprise Business towards the most relevant market segments.
• Accelerate the drive for 30% share in PC by better taking advantage of consolidation, while becoming more efficient and reducing costs.
• Better leverage technology to drive the transformation.

Added Yang: "You will see more communication today from senior leaders and over the next few weeks across the company. All changes will be completed ASAP."

"We do not make these moves lightly. I know how hard our people work. But we must ensure our long-term success and ability to meet our goals and commitments. We will act with logic and respect, speed and precision, clarity and consistency as we make these changes."

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