David RichardsLenovo is struggling in the PC notebook market as Acer snatches third spot in global sales. Now big cuts are tipped with Australia under the spotlight.
Lenovo plans to cut 1400 jobs worldwide – including in its Asia-Pacific operations – under a new restructuring plan. The plan, announced just as Acer pinched third place in global computer sales, shows how urgently Lenovo is seeking to boost profit outside its core market of China by bringing costs under control.
Lenovo aims to save US$100 million this fiscal year by eliminating or moving the 1400 jobs – roughly five percent of its global work force.
The cuts mark Lenovo’s second restructuring since the company acquired the PC division of IBM in 2005 for US$1.25 billion.
About 650 jobs will be cut outright and roughly 750 will be moved from the US and Europe to emerging markets. This will help Lenovo shake off some high-priced positions that were a legacy jobs from the IBM hierarchy.
There was no news at the weekend on how many Australian jobs, would be affected.
One of the big problems for Lenovo is that Acer replaced it as the world’s third-largest vendor of personal computers in the first quarter to March, two quarters ahead of schedule claims Acer chairman JT Wang and citing statistics compiled by Gartner Dataquest.
Acer’s sales volume in the first three months of the year rose by a better-than-expected 46.1 pct year-on-year, Wang said.
While the company normally sees a 3-5 pct sequential increase in its second-quarter sales, the pace of growth is likely to become even stronger this year, he added.
Wang said the vibrancy of the overall information technology market in the current quarter to June hinges on whether Microsoft’s Windows Vista operating system can quickly grow in popularity.