Lenovo Plants to Cut 2,500 jobs

Lenovo Plants to Cut 2,500 jobs

Lenovo plants to cut 2,500 jobs

China’s biggest PC-maker, Lenovo Group, plants to cut about 2,500 jobs after the company warned that it expected to report a loss in the latest quarter as a result of the global economic slump.

The cuts, which will see job losses at Lenovo’s operations worldwide, amount to about 11 per cent of the company’s global workforce.

“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,” William J. Amelio, Lenovo’s chief executive, said in a statement.

The company said it would also make sharp reductions in executive pay and bonuses in order to help trim its expenses.

Founded in 1984, Beijing-based Lenovo is the world’s fourth-largest PC maker. In May 2005 it took over the personal computing division of IBM in a deal valued at $1.25bn.

But the past year has seen computer sales plummet as the global economic crisis put the squeeze on demand for PCs. The company has also seen its market share eroded by tough competition from the likes of HP.

Lenovo’s quarterly profit shrank 78 per cent in the three months ended September 30, and the company said it expected to report a loss for the latest quarter which ended on December 31.

Trading in the company’s shares had been suspended on Wednesday ahead of the announcement.

Following the news, shares in Lenovo fell 17 per cent in Hong Kong on Thursday.