Lenovo Loses COO Gerry Smith, Head of Its PC Business, To Office Depot As PC Market Competition Intensifies

The top ranks of Lenovo's executive team are again in flux as Gerry Smith, COO and head of the company's PC and mobile devices business, departs to become the CEO of Office Depot.

Smith's departure is a continuation of changes that have roiled the Chinese firm's executive ranks in recent years and comes less than three months after he took the COO role. Before that, Smith spent less than two years as head of Lenovo's data center group.

"I think the mission has to be to get somebody in there and keep them," said Michael Goldstein, CEO of LAN Infotech, a Ft. Lauderdale, Fla.-based solution provider that works with Lenovo. "There's been a lot of movement, a lot of shuffling, and we need some stability. It's a tough spot. It's a very competitive space.

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Goldstein says LAN Infotech has seen "steady growth" in Lenovo's laptop and tablet lines. "They are putting out some really good products, but's it's very competitive. They're in direct competition with Dell, and then we see all this change happening."

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Office Depot announced it had hired Smith as CEO on Monday. Neither Smith, nor Lenovo responded to requests to comment for this story.

Lenovo now has to contend with a vacancy at the top of its giant PC business at a time when its market dominance has been whittled away by aggressive competitors like HP Inc. and Dell.

In the fourth quarter, Lenovo's PC business posted 1.6 percent growth in worldwide PC shipments, enough to keep it ahead of the advancing threats from both HP Inc. and Dell, both of which grew at a much greater clip than Lenovo, according to Gartner Inc. data.

Smith was made head of the PC business last November in a flurry of executive moves in which former Intel senior vice president Kirk Skaugen was made head of the data center business. Those moves followed closely behind the departure of Chris Frey, the company's high-profile commercial sales chief, just 18 months after he took that job.

In addition to its challenges in the PC market, Lenovo has also struggled to implement an effective strategy in the data center since buying IBM's x86 server business for $2.3 billion about two years ago. Lenovo's share of the server market lags competitors including HPE, Dell EMC and IBM, although Lenovo does have hyper-convergence partnerships with start-ups Nutanix and SimpliVity, as well as a storage partnership with Nimble Storage.