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.
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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.
