Lenovo Plans Restructuring, To Lay Off 1000 Jobs

Lenovo Group Ltd. today announced it would lay off 1,000 employees and move its corporate headquarters from Purchase, N.Y., to Raleigh, N.C.

President William J. Amelio said that Lenovo's notebook business is strong in developing and emerging markets, but that its desktop business faces severe competitive pressures. Lenovo said it expects to achieve annual savings of approximately 0 million from the exercise. Company spokeswoman Julie Gottlieb, said Lenovo, which completed the purchase of IBM's PC business early last year, had maintained offices close to IBM's headquarters in Armonk, N.Y., but wanted to move its executives closer to the product teams in North Carolina. Chairman Yang Yuanqing said that company’s core international focus for the next two years will be its PC business. It will emphasize on the small and midsize business market along with plans to introduce consumer PCs later this year. Lenovo will be centralizing its desktop team in China as one step toward moving its global supply chain closer to manufacturers and suppliers. Lenovo expects that the changes will help the company focus its global strategy on developing high-growth markets such as small and midsize businesses and emerging countries. The company will layoff about 5% of the company’s employees. It will identify the workers by the end of March, spreading the cuts throughout company offices in the Americas, Asia-Pacific and EMEA (Europe, the Middle East and Africa) regions. The company expects that the move will cost it 0 million this year but in the long run will generate savings to the tune of 0 million. Lenovo, ranked 3rd, is following the similar steps its competitors such as Dell and Hewlett-Packard have implemented over the last year.