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Chinese PC giant to cut workforce Asia job cuts amid economy woes
(about 6 hours later)
One of the world's largest computer manufacturers, Chinese-based Lenovo, says it is to cut about 2,500 jobs around the world. Moves by two large Asian technology firms to cut staff have reignited fears about the difficult economic challenges amid slumping consumer spending.
Lenovo blamed the cuts, which amount to nearly 11% of its total workforce, on the global economic downturn and a fall in demand for PCs. Electronic components maker TDK said it was cutting 8,000 jobs worldwide as it announced it expected to make its biggest ever annual loss.
And one of the world's largest computer manufacturers, Chinese-based Lenovo, says it is to cut about 2,500 jobs.
Shares on Asia fell sharply after a rally since the new year began.
Tokyo's Nikkei average closed down 3.9%, while Hong Kong's main index slipped 3.8%.
Analysts said that investors had been concerned as companies struggled to cope with falling spending in recession-hit major economies.
'Necessary'
TDK's decision to close four manufacturing bases came as it said it expected a net loss of 28bn yen ($304m; £201m) in the year to March, having previously predicted a 25bn yen net profit.
For its part, Lenovo blamed its job cuts, which amount to nearly 11% of its total workforce, on the global economic downturn and a fall in demand for PCs.
It said the cuts were part of efforts to save $300m (£200m) in the coming financial year.It said the cuts were part of efforts to save $300m (£200m) in the coming financial year.
They were, it argued, essential if the company was to remain competitive.They were, it argued, essential if the company was to remain competitive.
"As hard as this news is for all of our Lenovo employees, we believe the steps we are taking today are necessary for Lenovo to compete in today's economy," said chief executive William J Amelio."As hard as this news is for all of our Lenovo employees, we believe the steps we are taking today are necessary for Lenovo to compete in today's economy," said chief executive William J Amelio.
The company also said it expected to see losses in the final quarter of the financial year.The company also said it expected to see losses in the final quarter of the financial year.
The statement said Lenovo had been hit by "the unprecedented global economic challenges facing the world, resulting in a reducing demand for personal computers and related products".The statement said Lenovo had been hit by "the unprecedented global economic challenges facing the world, resulting in a reducing demand for personal computers and related products".
It also said that a reduction in demand from China, historically a major Lenovo market, had affected the company's fortunes.It also said that a reduction in demand from China, historically a major Lenovo market, had affected the company's fortunes.
Lenovo's net profits dropped 78% in the three months until the end of September.Lenovo's net profits dropped 78% in the three months until the end of September.