Dive Brief:
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China-based Lenovo Group announced it will lay off 10% of white-collar staff after sales of Motorola handsets dropped by one-third.
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The company said its mobile division lost nearly $300 million last quarter.
- As a result, Lenovo said it will immediately cut about 3,200 non-manufacturing jobs.
Dive Insight:
Lenovo bought Motorola from Google last year for $2.91 billion, hoping its foray into smartphones and handsets would help turn the company around.
The PC maker had already been feeling the effects of a sluggish PC market for the last several quarters. But last quarter, the company saw a 31% decline in handset sales from a year earlier. Despite the downturn, Chief Executive Yang Yuanqing said buying Motorola was a smart move that will eventually pay off.
"I still believe mobile is a new business we must win," Yuanqing said. "I still believe this acquisition (Motorola) was the right decision... Except Apple and Samsung there is no third strong (global) player. I believe that will be Lenovo."
