Lenovo considers layoffs amid the shrinking PC market
>
Lenovo would be willing to discuss cost-cutting measures, which could lay off some of its employees, as the company faces the same tough economic challenges that have forced many of its rivals to cut costs.
CFO Wong Wai Ming blamed the “confluence of global economic challenges and dynamic shifts in market demand” that has caused global PC sales to fall in recent months.
While Lenovo didn’t discuss exactly how much of its workforce could be at risk, Ming did hint at cutting “runway operating costs by approximately $115 million,” with the company’s focus instead on “high-performance growth engines.” margins”.
Layoffs at Lenovo and slowing PC sales
According to recent Canalys research, Lenovo moved 79,290 PCs in 2022, down 20.4% from the 99,667 it sold in 2021. The PC market share as a whole also fell by almost two percentage points.
The last quarter was particularly worrying for the company, with market share three percentage points below the 2022 average. Shipments in the quarter were also down 32.3% year over year.
According to Lenovo’s Q3 2022 earnings (which correspond to the last three months of 2022, as above), revenue was down 24% and net income was down 32%.
The company’s lack of details on layoffs may stem from CEO Yang Yuanqing’s belief that the market “could stabilize sooner than many expect.” The company believes total shipments could stabilize at pre-pandemic levels or higher in the second half of 2023, and that’s certainly not out of the question as some forecasts for 2023 point to an explosion in global IT spending.
Tech Radar Pro Lenovo has asked to confirm any plans to reduce headcount, the company did not immediately respond to our request.