More tech layoffs? Lenovo will make “workforce adjustments” to cut costs

What’s going on:  

Lenovo’s struggles have taken their toll, despite the company’s best attempts to paint a rosy picture in their latest financial reports. The truth is that major layoffs are inevitable in order to reduce costs by $850 million, according to Chief Financial Officer Wong Wai Ming. 

Why it matters:   

Lenovo saw a dramatic 24% year-over-year decline in revenues, amounting to more than $1 billion below analysts’ expectations of $16.39 billion, with actual revenues being reported as $15.3 billion, according to Reuters.  

This steep drop in profits follows a worldwide slump in PC demand due to the waning of the global COVID pandemic, which had previously spurred a surge in tech spending. 

Lenovo execs failed to mention the term “layoff” in their latest press releases on financial results; however, during a conference call with analysts, CEO Yang Yuanqing did admit to cutting spending. 

Reuters also reported that the tech giant, which has offices in the Triangle and Beijing, plans to lessen expenses and heighten efficiency. 

How it’ll impact the future:  

Tech layoff after tech layoff, it seems the tech industry can’t catch a break.  

Lenovo’s decline in revenue means it will eventually cut its workforce down, which is a common theme as of late of this hard-hit industry.  

It’s unclear when the tech industry will recover; according to Nerd Wallet, during 2022, more workers in tech were laid off than in 2020 and 2021 combined.