Create a free Manufacturing.net account to continue

China's Lenovo To Cut 2,500 Jobs

Computer maker said it will lay off about 11 percent of its work force, as part of a plan aimed at helping it remain competitive amid the global economic downturn.

RESEARCH TRIANGLE PARK, N.C. (AP) -- Lenovo Group said it will lay off 2,500 workers, or about 11 percent of its work force, as part of a plan aimed at helping the computer maker remain competitive amid the global economic downturn.

The Beijing-based company, the world's fourth-largest PC maker, also warned late Wednesday it expects to report a loss for its fiscal third quarter ended Dec. 31. The company's global headquarters are in North Carolina.

"As hard as this news is for all of our Lenovo employees, we believe the steps we are taking today are necessary for Lenovo to compete in today's economy, and in the long run, will help us to continue to deliver exceptionally engineered PCs to our customers worldwide," William J. Amelio, Lenovo's chief executive, said in a statement.

Lenovo said the job cuts will come from across the company's global operations.

The company also plans to cut executive compensation by between 30 percent and 50 percent, including merit pay, long-term incentives and other performanced-based payments this year.

In addition, Lenovo said it is consolidating its Asia Pacific and China operations into a single business unit.

The company also plans to relocate its call center operations from Toronto to Morrisville, N.C.

Lenovo expects to save about $300 million in the fiscal year ending March 31, 2010 as a result of its restructuring plan. But it anticipates it will book a pretax charge of about $150 million, the bulk of which will be taken in its fiscal fourth quarter.

Lenovo's quarterly profit shrank 78 percent in the three months ended Sept. 30. as the global economic slowdown battered sales.

More in Supply Chain