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Lenovo sees massive revenue slump that could lead to job cuts

By Hugh Fort in US business news, posted February 19, 2023

Lenovo might have to cut jobs after a 24 percent drop in revenue.

Reuters reports the Chinese tech company has seen its largest fall in revenue in 14 years as demand for electronics slumps.

The company says it will have to cut spending and make workforce adjustments because of the fall.

The Covid-19 pandemic saw a massive increase in sales, as people started working remotely or upgraded equipment.

Demand has fallen since that time, and Lenovo started to see its revenue contracting in the July-September quarter last year.

Lenovo Chief Executive Officer Yang Yuanqing told an analyst call after its earnings that the whole PC and mobile market experienced a "severe downturn" in the last quarter, and the company was looking to reduce expenses and improve efficiency.

Lenovo's chief financial officer, Wong Wai Ming, said the company aims to cut its run rate operational expenses by approximately $150 million to achieve a medium-term goal of doubling net margin.

He said: "This includes overall reduction in operational spending as well as workforce adjustments where necessary and appropriate."

Wong did not elaborate on whether this would involve layoffs.

Lenovo's rivals Dell and HP have both recently announced job cuts.

Dell will cut around 6,650 jobs - five percent of its global workforce.

Hewlett Packard is also cutting 6,000 jobs.

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