Lenovo to cut 3200 staff, put Motorola in charge of smartphones

Lenovo may be the world’s number one PC manufacturer, but that hasn’t prevented the company from recording heavy losses in the previous fiscal. The brand is in damage-control mode now and plans to lay off over 3200 employees and streamline its smartphone business with Motorola.

The Chinese tech giant’s net income has decreased by 50% to around $105 million. Its revenue increased by over 3% year-on-year to $10.7 billion, but still fell far short of its $11.29 billion projection. Lenovo has offered up a range of reasons for these figures including the increased competition in the smartphones business, macroeconomic challenges in South America and worldwide decline in PC sales.

While the company is far from finished, it’s been forced to fire 5% of its 60000 global workforce totaling up to about 3200 people. It’s part of a wider effort to save over $640 million in the second half of the year and about $1.35 billion annually. Lenovo is further looking to be in the green by aiming to increase its PC market share from 20.6% to 30%.

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According to a statement by the company, it also plans to restructure the smartphone arm of its business by working with Motorola to put their ‘complementary strengths’ to good use. Basically what Lenovo means by that is, it’s going to give handset development, design and manufacture to its subsidiary and continue supporting it in other ways.

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The brand hopes the move will result in a simplified product portfolio with more clearly distinguished models. Lenovo clearly needs such an extensive reshuffle, having been compelled to write off over $300 million in unsold phones. The overall plan makes sense and ensures each company focuses on what it does best – Lenovo at PCs and Motorola with smartphones.