A Lenovo store in Beijing. (Photo/CFP)
Chinese PC maker Lenovo has refuted rumors that it will slash its workforce 5,200 employees in September. The world's largest personal computer maker said it has been transforming its computer business and has been developing smart devices, so a round of layoffs is unlikely, according to the Chinese-language Beijing News.
Lenovo was recently reported to be ready to let go 10% to 15% of its workforce in September but the claims did not specify whether this would apply to the firm's subsidiaries around the world or only within China. The company had around 35,000 employees as of the end of March.
The rumors came as a surprise to many after the company's chairman Yang Yuanqing shared US$3 million of his bonus with workers after Lenovo posted record sales. Insiders speculated that the rumored layoff may be a preemptive move to reduce costs as consumers shift their focus to mobile devices, which may erode the company's margins in the future.
The company has conducted four major rounds of layoffs in the past. Around 600 employees were let go before it merged with IBM in 2004. William Amelio laid off 1,000 employees when he became the company's CEO in 2006. The following year, the company cut 1,400 jobs in three areas besides the Greater China region. Lenovo reduced its workforce by 11%, or 2,500 employees, in 2009 to restructure its resources.
An executive at Lenovo said the company has been transforming its PC businesses and developing smart devices. The company will need full support from its workforce, so layoffs are unlikely, the source said.
According to Lenovo's quarterly financial report, the company's net profits reached US$174 million in the first quarter, which represented a 23% increase compares to the same period last year. Global market information advisory firm IDC said Lenovo has replaced HP as the world's largest PC seller by shipments.
Yang Yuanqing 楊元慶