Lenovo chairman and CEO Yang Yuanqing has pledged to increase efficiency across the company, and that includes reducing headcount by 3,200 — 10 percent of Lenovo's non-manufacturing workforce and about 5 percent of the entire company. In an email to employees following the first-quarter earnings report, Yang identified two major challenges for Lenovo: the need to streamline in a declining PC market, and to properly structure mobile and enterprise businesses for future growth.
In mobile, Lenovo has to "better leverage the complementary strengths of Lenovo and Motorola to quickly drive growth," according to Yang, and will have "a much simpler, more streamlined product portfolio with a reduced number of clearly differentiated models" driven by Motorola. Yang also wants to extend Lenovo's PC lead from 20.6 percent of the market to 30 percent while cutting costs and becoming more efficient.
These changes will be completed "ASAP," says Yang, though the letter doesn't go into detail regarding which positions are most at risk. Lenovo reported first-quarter revenue of $10.7 billion, up 3 percent from a year ago, but profit dropped 51 percent to $105 million. The company says it faced "severe challenges" including a slipping PC market and increased mobile competition in China, but characterized its results as "solid."