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Lenovo To Layoff Employees, Shift Mobile Efforts To Motorola

August 12, 2015 - Written By Justin Diaz

Lenovo is not a name that most U.S. consumers are familiar with when talking about smartphones. This isn’t too much of a surprise considering that most of their smartphones never make it stateside and the majority of their products that are sold in the U.S. are floating around in the desktop/laptop computer space. Lenovo actually has quite a range of smartphones on offer though, under their own branding no less. In spite of all this, things are about to shift big time at Lenovo as the company’s CEO Yuanqing Yang wrote a letter to the company today stating that they would be altering some of their focus for products in the mobile space going forward.

Part of this includes employee layoffs, as company reorganizations often do. Following this announcement Lenovo states that a total amount of 3,200 employees will be laid off as part of the effort and refocus which is partially about cutting costs to help move forward. Yang also stated that their new focus shift involves making some adjustments to their structure of operations as well as their product line to place more emphasis on products coming out of Motorola Mobility which they purchased from Google in 2014. Cutting employees isn’t the only way Lenovo will be looking to save cost though, and will also include getting rid of smartphone inventory to the tune of $300 million which could mean some steep discounts on Lenovo branded smartphones where they’re sold.

Overall Lenovo is aiming for a cost cut of about $1.35 billion annually, and almost half of that, (around $650 million) to be cut by the end of this year. Aside from the company layoffs, mobile restructuring is the core focus of these changes, with Yang stating that “We will have a much simpler, more streamlined product portfolio with a reduced number of clearly differentiated models. To create a faster, leaner business model, we will leverage our global sales force across Lenovo and we will accelerate the work already well underway to maximize efficiency in our global supply chain.” While some had speculated, feared even that a sale of Motorola might mean assimilation of their products into the Lenovo chain, it now seems things are quite different, as Lenovo is hedging their bets on what Motorola puts out, stating that Motorola would be in charge of smartphone design, development, and manufacturing moving forward.