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Lenovo reports sharp profit drop and job cuts Lenovo cuts 3,200 jobs as profits halve
(34 minutes later)
Chinese computer and smartphone company Lenovo has reported quarterly results, missing expectations and announcing worldwide job cuts. Chinese computer and smartphone company Lenovo has announced 3,200 job cuts as it reported a halving of profits.
The firm's net profit plunged by 51% compared to the same quarter last year to $105m (£67m). First-quarter net profit plunged 51% to $105m (£67m). Revenues rose 3% to $10.7bn, but this was below forecasts.
Quarterly revenue, however, rose by 3%, still short of market expectations. Lenovo said it had been facing the "toughest market environment for years", reporting a steep decline in sales at its mobile division.
The firm posted a steep decline in sales for its mobile division, reflecting intense international competition on the smartphone market. The job cuts represent about 10% of its non-manufacturing employees and 5% of its global workforce,
Lenovo, the world's biggest PC-maker, said it plans to lay off around 10% of its worldwide non-manufacturing employees, about 3,200 jobs, as part of overall cost-cutting measures aimed at saving $650m in the remainder of 2015. Lenovo, the world's biggest PC-maker, said the cuts were part of a cost-cutting programme aimed at saving $650m in the remainder of 2015.
Lagging smartphone sector Smartphone woes
Lenovo reported significant declines in its global computer and tablet sector, as well as increasing competition and slowing growth in the smartphone market.Lenovo reported significant declines in its global computer and tablet sector, as well as increasing competition and slowing growth in the smartphone market.
Chief executive Yuanqing Yang said the company would also restructure its smartphone business amid the "toughest market environment in recent years". Chief executive Yuanqing Yang said the company would also restructure its smartphone business.
The company last year bought the Motorola brand from Google for $2.9bn to boost its position on the market, citing "intensifying competition and long product development lifecycles" as particular challenges in the sector. Last year, the company last year bought the Motorola brand from Google for $2.9bn to boost its position in the market.
Lenovo's mobile division saw a pre-tax loss of $292m in the three months to the end of June. However, Motorola's contribution to Lenovo's smartphone shipments fell 31% from a year earlier to 5.9 million units.
According to Lenovo, its PC business reached a worldwide share of 20.6%, with a 13% share in the critical US market. Lenovo's mobile division recorded a pre-tax loss of $292m in the three months to the end of June.
Lenovo said its PC business reached a worldwide share of 20.6%, with a 13% stake in the key US market.