Yesterday, Lenovo issued an announcement saying that it will conduct a large-scale layoff on a global scale and lay off about 1,000 employees. It is expected that the Motorola department will be the hardest hit in this layoff.
Motorola Mobile was acquired by Lenovo from Valley singer for $2.9 billion in 2014. So far, the total number of employees in this department is only 1,200. Therefore, this layoff of about 1,000 people will mean that the Motorola department is almost empty. As early as a year ago, Lenovo had made 500 layoffs for Motorola. What caused Lenovo to sell the Motorola department?
Lenovo officials stated that "As part of the ongoing strategic integration of Lenovo and Motorola's smartphone business, Lenovo is further adjusting its organizational structure, optimizing its product line, and participating in the global smart phone market competition in the best possible way."
Overall, poor performance is the main reason for this layoff. In the most recent year, Lenovo’s mobile business and market share continued to decline, with a total loss of US$714 million in the second quarter of fiscal year 2015-2016, which was Lenovo's first loss in six years. In the event of poor performance, Lenovo hopes to reduce costs through layoffs is also reasonable.
Of course, after this large-scale layoff, Lenovo will retain Motorola’s Motorola Mobile Headquarters as its global R&D hub for its smartphone business, so Lenovo will not give up Motorola’s products.
The following is Lenovo's response to the layoffs:
Lenovo Group today announced an organizational optimization plan, because the plan affected fewer than 1,000 employees, mainly overseas. The plan is related to the ongoing strategic integration of Lenovo and Motorola's smartphone business. Lenovo will further optimize the organization, improve efficiency and enhance innovation. Recently, Lenovo launched Moto Z, an epoch-making modular mobile phone, to lead the development of mobile phones and smart devices.
At the same time, Lenovo is also making adjustments in other business areas, continuously controlling costs, increasing efficiency, and continuously improving overall performance. Lenovo will continue to work hard to ensure long-term profitable growth in various businesses.
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