Lenovo, a technology giant, is said to have initiated workforce reductions due to a significant downturn in its PC business. The decline in sales is attributed to the confluence of global economic challenges and dynamic shifts in market demand. In December 2022, Lenovo’s revenue plummeted by 24 percent YoY to $15.3 billion, and its net income dropped to $437 million.
As part of a larger reduction in spending, Lenovo’s CEO Yang Yuanqing had mentioned in February about an impending ‘workforce adjustment’.
As part of the company’s cost-cutting plan, approximately $115 million will be allocated, with an expected significant impact on the workforce.
Lenovo will reduce operational expenses and adjust its workforce where necessary while maintaining investment in areas that promote growth and transformation. Research and development, marketing, and customer service are among the business units that will be affected. The company will likely shift its focus to areas that accelerate growth, such as cloud computing, artificial intelligence, and data analytics.
The current economic downturn is not unique to Lenovo, as it also affects many other companies, including Deloitte, which is planning to cut 1,200 jobs in the US. The technology industry is particularly susceptible to economic downturns as it relies heavily on consumer spending, which can be affected by uncertain economic conditions. Furthermore, the shift to remote work has had an impact on the industry, resulting in a slowdown in sales.
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