Lenovo is the latest major PC maker to feel the heat from the shrinking PC market. The largest computer maker plans to cut jobs after net profits fell for the first time in almost three years. financial times report.
It didn’t say how many jobs the company plans to cut.
According to Lenovo Fiscal Year Third Quarter Report (PDF)“Revenue fell 24% year-on-year to US$15.3 billion.”
The company’s biggest problem is its Intelligent Device Group (IDG), which includes computers, smartphones, tablets and other hardware. Revenue decreased 34% year-over-year and operating profit decreased 37%. The company’s report says PC division shipments have “regressed to pre-COVID levels,” but there are still too many products in the channel, but Lenovo says his IDG still maintains market share leadership. claim.
In a conference call with investors, Lenovo CEO Yang Yuanqing and Chief Financial Officer Wong Wai Ming said the company needs to cut costs by $150 million. register report.
If Lenovo cuts jobs, it would not be the first in the industry. Dell recently announced 6,650 cuts. HP said 4,000 to 6,000 employees will be eliminated over the next three years. Additionally, many other tech industry companies are laying off, including Microsoft, Meta, Alphabet, Coinbase, Amazon, and Salesforce.
Lenovo’s results are also optimistic. IDG remains the market leader and says the company still has plenty of cash. Lenovo also claims that “the market could stabilize sooner than many expected in 2023,” but didn’t say why it believes that will happen.
In December, Canalys analysts released a report highlighting a 12% decline in US PC shipments in the third quarter of 2022. Including tablets, Apple was the number one PC vendor in the country (without tablets, the honor would go to Dell at the time).
“The US PC market will face further headwinds going forward,” said Canalys analyst Brian Lynch. said in the report“Despite the holiday season in the fourth quarter, the market will continue to be weak. Cash-strapped consumers will cut spending on expensive tech products. We’ve ramped up promotions in recent months to make room for new device launches as we get closer, but overall, retail inventory is still growing faster than sales. It will slowly start to recover in 2020, but the majority of device updates could happen in 2024.
Meanwhile, Lenovo and its competitors are still producing new devices, updating most of their lineups at CES 2023. They face a bumpy road ahead as they make their way back to people’s wallets.
