The PC Market Continues To Investigate, Lenovo Plans To Lay Off!

Photo by Nakul on Unsplash

JAKARTA - For the first time in almost three years, Lenovo's net profit has dropped drastically. The Personal Computer (PC) company must take bitter steps, Termination of Employment (PHK) in future employees.

Based on Lenovo's third-quarter (Q3) fiscal year report, their revenue fell 24 percent year-on-year (YoY) to 15.3 billion US dollars equivalent to Rp232 trillion. Far enough from analyst estimates that will average 16.4 billion US dollars.

At a conference call with investors recently, Lenovo CEO Yang Yuanqing and CFO Wong Wai Ming said the company needed to cut the cost of 150 million US dollars to IDR 2.2 trillion, which included an overall reduction in operations and workforce adjustments if needed.

However, it did not say how many employees would be affected. The company's biggest problem is Intelligent Devices Group (IDG), which includes computers, smartphones, tablets, and other hardware.

The revenue fell 34 percent and operating profit fell 37 percent YoY each. The company stated that PC sector shipments were moving back to pre-COVID-19 levels, while there were still many products available.

Even so, Lenovo claims IDG still maintains its leadership in its market share. The company also suspects the market may soon stabilize sooner than expected in 2023, but the company has no reason to believe it will.

If Lenovo was really going to lay off, he wouldn't be the first. Dell recently announced 6,650 employees who were laid off, and HP said it would reduce between 4,000 and 6,000 employees over the next three years.

In addition, many other technology industry companies have experienced layoffs, including Microsoft, Meta, Alphabet, Coinbase, Amazon, Salesforce, and even Google.

Another report from market analyst IDC, said private computer makers around the world had struggled with the drop in global demand following a work-from-home boom in the pandemic era.

It is proven that PC shipments worldwide fell 28 percent in the last quarter of 2018, making Lenovo and his competitors HP and Dell lose money.

Even with analysts at Canalys who published the report in December, highlighting a 12 percent drop in PC shipments in the US in Q3 2022, as quoted by Tom's Hardware, Saturday 18 February.

Only Apple and Acer experienced annual growth in the US, while Dell, HP, Lenovo, and others all went down.