Lenovo to lay off 2,500 employees

New Delhi: Lenovo, a provider in desktops and notebooks, announced that the company is going to lay off 2,500 employees. The company has experienced losses in Dec due to recession and planned lay off to realize annual savings of $300 million for the year ending in March 2010. The job cuts figure includes approximately 11 percent of its world wide workforce, according to a statement issued by Lenovo.

Lenovo also plans to reduce executive compensation by 30 to 50 percent, including merit pay and long-term incentives, as well as any performance payments for the coming year.

These actions in total will help take advantage of Lenovo's strengths as a global organization to better align its resources with shifting customer demands in the current marketplace, said the release

“Although the integration of the IBM PC business for the past three years was a success, our last quarter's performance did not meet our expectations,” said Yang Yuanqing, Chairman of the board, Lenovo.

“We are taking these actions now to ensure that in an uncertain economy, our business operates as efficiently and effectively as possible, and continues to grow in the future,” he added.

As part of the restructuring, Lenovo is consolidating its China and Asia Pacific organizations, which are currently run as separate business units, into a single business unit-Asia Pacific and Russia (APR). It expects the new organization would help reduce its operating expense and eliminate duplicative support and staff functions.

APR will be headed by Chen Shaopeng, Currently Senior VP, and President, Greater China. David Miller, Senior VP and President, Asia Pacific, will remain with Lenovo for a transition period.

The resource redeployment plant will help the company increase its efficiencies and become more competitive in the face of the continuing global economic downturn, said the release.