DailyTech - Lenovo Lays Off 1,000, Heads to Raleigh

Submit News

Hardware Lenovo Lays Off 1,000, Heads to Raleigh
Brandon Hill (Blog) - March 17, 2006 1:00 PM

15 comment(s) - last by mxzrider2.. on Mar 20 at 11:40 PM

Lenovo's restructuring plan will save $250 million USD

There is some major shuffling going on at Lenovo these days. Citing increased competition in the global PC market, Lenovo is cutting its workforce by 1,000. The cuts will come from full-time positions in the Americas, Asia and EMEA and represents a 5% reduction from Lenovo's global workforce of 21,400.

The company is also moving its corporate headquarters from Purchase, NY to Raleigh, NC. Raleigh is already home to Lenovo's ThinkPad group, so it makes financial and logistical sense to have its headquarters located there as well.

"Our plan integrates Lenovo’s global sales organization and back-office support into one highly responsive customer-service unit, and ensures that, where it makes sense, teams are centralized for better performance and efficiency," said William J. Amelio, president and chief executive officer of Lenovo. "These steps position Lenovo as a more effective global competitor while supporting our commitment to lead in innovation and customer satisfaction," Mr. Amelio said.

Lenovo expects for its restructuring plan to be completed within the next 6 months to a year. In the end, the company expects to save up to $250 million USD.

The company is also looking to new product lines to increase its visibility in key markets including North America. Lenovo's 3000 series desktops and notebooks were launched in February. The desktops start at $350 while the new entry-level notebooks start at $600. According to Amelio, these products are key to Lenovo's profit growth and will help it better compete in a market dominated by Dell and Hewlett-Packard.

Comments

Threshold

Username
Password
remember me

This article is over a month old, voting and posting comments is disabled

Sucks for leveno...

By Shadowmage on 3/17/2006 1:04:03 PM , Rating: 1

Lucky you, Tim (firebirdphreak). Leveno coming to your hometown :)

RE: Sucks for leveno...

By sync216 on 3/17/2006 1:10:25 PM , Rating: 2

I love how they spin it as they are moving to Raleigh, half the people they are laying off are in the Raleigh area now- they are moving those jobs to china.

Parent

RE: Sucks for leveno...

By fbrdphreak on 3/17/2006 1:20:16 PM , Rating: 2

Guess its a good time to be a valuable employee, eh?

Parent

RE: Sucks for leveno...

By Marlin1975 on 3/17/2006 1:26:13 PM , Rating: 2

Correct. Yes they are moving to Raleigh but most of the cuts are in Raleigh. So in the end Raleigh LOSES jobs not gains any.

My girl works at IBM and my understanding is they had an agreement to keep the employees for a length of time. I think Lenovo is paying some penalty for the ability to let some go. Not sure how they will work it or they will not let them go until the time period expires.

But not good for US workers… again.

Parent

RE: Sucks for leveno...

By TomZ on 3/17/2006 3:01:55 PM , Rating: 2

If you don't like the situation, then you should start your own business. Then you can make the decision to keep on board US employees that cost more than those other countries. Of course, this will hurt your margin, profit, and your competition may eat your lunch, but it would be your decision.

Look, I don't mean to be flippant about US job loss - I am a US worker also - but you have to understand that Lenovo doesn't make decisions like this lightly. They need to ensure their survival in a competitive market. They do not have price control enough to ensure high wages for all of its employees. If Lenovo tries to buck the economics of the situation, it may run losses and fail, thus causing even more jobs to be lost.

I think a lot of people file these cuts into the category of "corporate greed," but I think these companies face a reality that we sometimes don't understand.

Parent

RE: Sucks for leveno...

By masher2

(blog) on 3/17/2006 5:51:25 PM , Rating: 2

> " I think these companies face a reality that we sometimes don't understand. "

Exactly so. And companies who refuse to face those realities wind up out of business, and forced to lay off all their workers, instead of just part of them.

Parent

RE: Sucks for Lenovo

By Fnoob on 3/18/2006 8:43:40 AM , Rating: 2

We agree then, on something ;)

I am directly affected by this as well. I hope the 'valuable employee' above has his resume polished up.

The impetus to move not just jobs, but entire operations oversees is a troubling trend that has been going on for too long. We are slowly, but quite steadily moving from a manufacturing economy (which made this country great) to a service economy.

My suggestions? Get out and actually vote. Read the "Fair Tax Plan" by Lender/Boortz. Support it. Make your representatives support it or vote to replace then with someone who will. If this real reform was implemented (instead of Bush's tired 'more of the same' reform) we would enable the US to become the largest corporate tax shelter in the world. That would put a hard stop to the flood of jobs and companies oversees.

Parent

RE: Sucks for Lenovo

By TomZ on 3/18/2006 12:53:46 PM , Rating: 2

If America had this type of protectionist philosophy, we would also have resisted the change from an agricultural-based economy to an industrialized economy. We need to let jobs move to where they are most efficiently done. If manufacturing jobs move overseas, then we need to re-train for service-based economy jobs. At the individual level, this is difficult and takes time, but if we don't do that, we will clearly lose the prosperity that we have today.

Parent

RE: Sucks for Lenovo

By masher2

(blog) on 3/19/2006 1:11:08 AM , Rating: 2

> "If America had this type of protectionist philosophy..."

I believe you may have misunderstood his post (or else I did). He's advocating a change in tax laws to make business more efficient here in the US, rather than driving them overseas due to confiscatory tax policies.

Parent

RE: Sucks for leveno...

By fbrdphreak on 3/17/2006 3:50:18 PM , Rating: 2

I'd be interested to see what jobs were lost specifically.

Parent

RE: Sucks for leveno...

By mxzrider2 on 3/20/2006 11:40:04 PM , Rating: 2

er leveneo is from china so i bet thats where they would like those jobs

Parent

RE: Sucks for leveno...

By KorruptioN on 3/17/2006 1:14:02 PM , Rating: 2

Len o vo.

Parent

RE: Sucks for leveno...

By CrazyBernie on 3/17/2006 7:56:18 PM , Rating: 2

C orruption :p

Parent

well...

By hans007 on 3/18/2006 8:43:49 AM , Rating: 2

seeing as IBMs former pc group was only sometimes profitable etc, and IBM is a giant corporation with huge bueracracy I am not surprised at all. I work at a huge company as well and there is tons of waste everywhere.

Job cuts are not necessarily corporate greed. they are corporate survival in the PC manufacturing sector. profit margins in that sector are razor thin.

if its anyone's fault its consumers. competition has made the industry what it is today, super cost concious. if we wanted to spend a little more on computers so 1000 likely of the less needed workers got to stay on well thats not gonna happen. ibm manufacturing was already not in america as it was, you probably do not need 21000 employees just to design and market PCs. emachines had like 400 employees in america and was actually profitable when gateway bought them in comparison.