Lenovo Announces Restructuring Plan; 1,400 Jobs Affected

PC maker will cut 1,400 jobs, though 750 of those will be transitioned into emerging markets.

Chinese PC maker Lenovo announced Thursday a restructuring plan to enhance business performance and accelerate growth.

Lenovo expects to reduce its global workforce by 1,400, or roughly 5 percent. However, approximately 750 employees will be transitioned into emerging markets. The company plans to eliminate the remaining 650 positions within one to twelve months.

“There is no doubt we have made strong progress in the past year, but it’s clear we need to further accelerate that progress to be as profitable and cost efficient as the rest of the industry,” said William J. Amelio, president and CEO of Lenovo. “Today’s actions are necessary to enable us to reduce expenses and grow our business.”

Under the restructuring plan, the company plans to:
• Further strengthen supply chain and capture more efficiencies by streamlining the global supply chain organization and aligning more work closer to the supply base;
• Integrate software testing into Lenovo’s China operations;
• Further integrate key customer support functions;
• Streamline sales and marketing organizations; and
• Centralize teams and align multi-national investments and resources.

The company estimates that the restructuring will save $100 million in the 2007-08 fiscal year.

“While these actions are difficult, we believe the ‘tipping point’ is within reach,” Amelio added.

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