Lenovo Cuts 2% Of Workforce Amid Broad PC, Data Center Market Challenges


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PC market giant Lenovo said it has laid off about 2 percent of its workforce, including an undisclosed number in its Americas headquarters in Morrisville, N.C.

The cuts come as the company contends with diminished standing in the global PC market, partner uproar over recent rebate and pricing changes, as well as the challenges of launching a new data center strategy.

Worldwide, Lenovo has about 52,000 employees in 160 countries.

In a statement, a Lenovo spokesperson said the $43 billion company is "on the right path to profitable growth," and is "taking this step now to ensure that we are as competitive and cost-efficient as we can be." The spokesperson said the company "will continue to invest in our growth engines, including our mobile and data center businesses, and non-hardware businesses such as artificial intelligence and big data."

[Related: Lenovo Falls To No. 4 In U.S. PC Market Behind Apple]

Lenovo's enterprise business is run from its U.S. headquarters.

The spokesman said Lenovo, which has about 2,700 employees based in its U.S. headquarters, expects to make further cost adjustments. The company, the spokesman said, "will continue to make adjustments in all areas of the business as part of our continued effort to manage costs, drive efficiency and support ongoing improvement in our overall financial performance."

Lenovo began notifying employees of the layoffs in late September. All those affected have now been notified, and are being given the opportunity to apply for other jobs within the company, the spokesperson said.

In August, Lenovo posted a $72 million loss for the first quarter of its fiscal year compared to a $173 million profit in the same period the prior year. It was the first quarterly loss for the company in nearly two years.

Michael Goldstein, CEO of LAN Infotech, a Ft. Lauderdale, Fla., solution provider that works with several vendors including Lenovo, said that while the cuts, as well as the churn that has roiled the company's executive ranks in recent years, is concerning, it isn't problematic unless it impacts LAN Infotech's relationship with the company.

"It's concerning as a business owner, but I don't think any of my clients would say, 'Hey, did you see those layoffs, maybe we should look at Dell,'" Goldstein said. "For us, it's about trying to get the best product out there for our customers, and we haven't seen [the layoffs] affect support. As long as it doesn't affect my support, or how we get in touch with somebody, and I get my monthly updates we're fine."

"I'm lucky enough to be in a region that has a local Lenovo rep," Goldstein said. "Hopefully it all settles down."

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