Lenovo will lay off 3200 employees and entrust Motorola with the smartphone making, following a disappointing financial quarter

Lenovo will lay off 3200 employees and entrust Motorola with the smartphone making, following a disappointing financial quarter
It's been a gloomy year of job cuts for the mobile industry, as the likes of BlackBerry, Microsoft, Sony, HTC, and others have embarked on "streamlining" their operations. In other words, their products don't sell in the oversaturated, complicated market of today, which reduces the need for labor and calls for downscaling business.

In Lenovo's case, the company faced "severe challenges" in its main markets — PCs, tablets, and smartphones — in the second quarter of 2015. Net income declined 51% from last year, down to US $105 million. The PC market is in decline, while growth in smartphones has slowed down amidst increased competition.

Still, Lenovo did manage to deliver solid results amidst the recession, gaining market share in the PC and tablet sectors, and driving smartphone shipments outside China up 68%. Alas, the financials didn't meet expectations, which steered the ship towards critical measures for achieving profitability and sustainable growth. As a result, Lenovo will set free 3,200 employees from its non-manufacturing workforce around the world.

The move belongs to a complex restructuring, which also aims to better leverage the complementary strengths of Lenovo and Motorola by simplifying the product portfolio with clearly-differentiated models, and relying solely on Motorola for design, development, and manufacturing of smartphones. Altogether, the cost-cutting measures will shave about $1.35 billion of expenses on an annual basis.

While Lenovo's mobile division will offload most of the product development to Moto, the parent company will be providing the sales know-how and business tactics. Lenovo is known for its direct sales approach, bypassing carriers and offering customers competitively priced unlocked phones. The strategy trickled down to Motorola, whose latest models are being sold direct, are carrier-agnostic, and boast remarkably fair prices.


source: Lenovo

FEATURED VIDEO

8 Comments

3. HugoBarraCyanogenmod

Posts: 1412; Member since: Jul 06, 2014

Too much phone release from Lenovo recently, and always make me headache when I wanna recall the model to some of my hardcore Lenovo customers. It's time for Lenovo to set the segments right and decide which brand tackle which segment. we all know Huawei-honor, Xiaomi-redmi, Oppo-Oneplus, and their segments are set very clear, set your Lenovo-moto right this times

9. itsdeepak4u2000

Posts: 3718; Member since: Nov 03, 2012

Also MX-M from Meizu.

5. Af1rPA

Posts: 712; Member since: Jun 12, 2014

Lenovo don't even sell there phones here in Australia. Non of the retails stores here have them.

7. Kame_Hame_Haaaaa

Posts: 360; Member since: Jul 29, 2015

Good move!!! I also not like lenovo design language, and I really hate lenovo software. I hate the chinese android skin.

8. Shocky unregistered

I don't like the design of either, but I dislike Motorola's designs less than Lenovo's if that makes sense.

11. jroc74

Posts: 6023; Member since: Dec 30, 2010

lol...it makes sense. The lesser of 2 evils so to speak. Nothing wrong with that.

10. iLovesarcasm

Posts: 589; Member since: Oct 20, 2014

Good job on axing people who cannot contribute.

14. ibend

Posts: 6747; Member since: Sep 30, 2014

please dont make another phone, just let motorola handle all about smartphone making, motorola has great sense of design, they know what people want, and they know how to make affordable phone with great spec and quality

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.