The impact of a contracting PC market has most recently been felt by Lenovo, a significant PC manufacturer. The largest computer manufacturer in the world is reportedly preparing job cuts after experiencing its first net profit decline in nearly three years. The corporation did not specify how many jobs it planned to cut.
Revenue declined by 24 percent year-on-year to US$15.3 billion, according to Lenovo’s fiscal year Q3 report (PDF). The most serious problem for the company is its Intelligent Devices Group (IDG), which includes computers, smartphones, tablets, and other hardware. Revenue was down 34% and operating profit was down 37% year on year.
According to the company’s report, PC sector shipments “regressed to pre-COVID levels” while there was still too much product in the channel, though Lenovo claims IDG maintained its market share leadership.
Lenovo CEO Yang Yuanqing and chief financial officer Wong Wai Ming told investors on a conference call that the company needs to cut $150 million in costs, which “includes overall reduction in operational spending as well as workforce adjustments where necessary and appropriate,” according to the Register.
If Lenovo goes ahead with layoffs, it will not be the first in the industry to do so. Dell recently announced 6,650 layoffs, and HP said it would lay off 4,000 to 6,000 workers over the next three years. In addition, many other tech companies, including Microsoft, Meta, Alphabet, and Amazon have laid off employees.
Lenovo is optimistic about its results. It claims that IDG is still the market leader and that the company has plenty of cash. Lenovo also claims that “the market might stabilise sooner than many expected in 2023.