Lenovo plans job cuts, ‘cost reduction measures’ as revenue slumps 24% in Q3

During an earnings call with Bloomberg, Lenovo CEO Yang Yuanqing, said that “the smart devices market is in its worst period.” He said that the company would need to make some adjustments in the workforce to compensate, but stopped short of saying what this will entail.

Yuanqing said that the cuts would be, “just a very small portion,” of the overall cost reduction measures.

Bloomberg analyst Steven Tseng blamed, “Deteriorating enterprise spending amid slowing economic growth and geopolitical tension,” as the main culprits behind the market slump. Tseng said that “headwind might persist in the near term”.

Last month, market analysis firm Gartner reported that smartphone and PC shipments are expected to fall for the second straight year.

According to IDC, smartphone shipments declined 18.3 percent in December, and the Indian smartphone market declined 10 percent YoY (year-over-year).

Also Read | Global PC shipments drop 16.2% in 2022, as recession fears, high-interest rates bite

Shipments for smartphones in India fell 27 percent with only 144 million units shipped, the lowest since 2019.

The PC market did not fare any better. Global PC shipments dropped 16.2 percent in 2022, according to Gartner. Only 65.3 million PCs were shipped in Q4 2022, a 28.5 percent decline compared to the last quarter, and the biggest fall in the market since the mid-1990s.

According to Gartner, “Rising global interest rates and cost of living have dampened demand for smartphones, hitting companies ranging from Samsung to Apple.”