PC giant hopes the market will bounce back soon
Lenovo is said it is prepared to discuss cost-cutting measures that could see a number of its workers being made redundant as the company faces the same tough economic challenges that have left many of its rivals to cut costs.
CFO Wong Wai Ming blamed the “confluence of global economic challenges and dynamic shifts in market demand”, which has seen global PC sales dip in recent months.
While Lenovo didn’t discuss precisely how many of its staff could be at risk, Ming did allude to a reduction of “runway operational expenses by approximately $115m”, with the company’s attention instead turning to “high-margin growth engines”.
Lenovo layoffs and slowing PC sales
According to recetn Canalys research, Lenovo shifted 79,290 PCs in 2022, down 20.4% from the 99,667 that it sold in 2021. Its PC market share as a whole dropped too, by almost two percentage points.
The final quarter was especially troubling for the company, with market share three percentage points below the 2022 average. Shipments in the quarter dipped by 32.3% year-on-year, too.
According to Lenovo’s Q3 2022 earnings (which aligns with the final three months of 2022, as above), revenue dropped by 24% and net income saw a 32% decline.
The company’s lack of detail regarding layoffs could stem from CEO Yang Yuanqing’s belief that the market “might stabilize sooner than many expect”. The company believes that total shipments could stabilize to pre-pandemic levels or higher as soon as the second half of 2023, and that’s certainly not out of the question with some predictions for 2023 suggesting a boom in global IT spend.
TechRadar Pro has asked Lenovo to confirm any plans to reduce headcount, the company did not immediately respond to our request.