Lenovo may choose to lay off staff to deal with the weak PC market

Lenovo recently released its third-quarter results for the 2022-2023 fiscal year, showing a net profit of $4.37 million, a year-on-year decline of 32%, ending the past 10 consecutive quarters of growth. With the downturn in the PC market, like many companies in the industry, Lenovo is likely to choose to lay off employees in response to weak market demand.

According to Financial Times, Lenovo CEO Yang Yuanqing said in the financial report conference call that the smart device market is now in the worst period, and Lenovo will reorganize its workforce to reduce some business expenses. Businesses including personal computers, tablets, mobile phones, etc. contributed more than 80% of Lenovo’s revenue. In the third fiscal quarter of the 2022-2023 fiscal year, the revenue and operating profit of these parts of the business fell by 34% and 37% year-on-year, respectively.

Lenovo CEO Yang Yuanqing and Chief Financial Officer Wong Wai Ming said that $150 million in cost reductions is needed, which includes cutting operating expenses across the board and adjusting the workforce where necessary and appropriate. However, there is no specific explanation of the specific scale of layoffs and positions.

According to market data from IDG, Lenovo is still the market leader with a lot of cash on hand. Lenovo said the market could stabilize more quickly in 2023 than many had expected, though it did not give specific reasons to back up that claim. Like many of its peers, Lenovo showed off a slew of new devices at CES 2023. With a recession, inflation fears, and the fact that many people have just bought new computers in the past two years, getting people back into their pockets is not going to be easy.