One of the world’s largest computer manufacturers, Chinese-based Lenovo, says it is to cut about 2,500 jobs around the world.
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.
It said the cuts were part of efforts to save $300m (£200m) in the coming financial year.
The Wall Street Journal writes more on the financial blow to Lenovo:
The news sent Lenovo’s share price plunging by 17% in early trading in Hong Kong on Thursday. Trading in the shares was suspended on Wednesday.
Investors have been expecting changes as Lenovo loses traction outside of China, its core market. The company, which posted a 78% decline in net profit for its fiscal second quarter in November, has warned that business would continue to suffer as the global economy continues to slow.
The company needed to “do something for investors, and also more importantly for themselves,” said Charles Guo, analyst for J.P. Morgan Chase in Hong Kong. He said Lenovo’s failure to gain ground in major consumer markets, including the U.S., is disappointing and points to internal problems.