WRAL Tech Wire

Amelio's departure, Yang's new role do not bode well for Lenovo in N.C.

Lenovo's main building in Morrisville Image 1 of 4 · Next Image…

Related Stories

• PC shipments decline worldwide in 4Q; Lenovo loses market share
• No more layoffs, Lenovo CEO tells news service
• Hedging layoffs comment, Lenovo CEO says cost-cutting is 'ongoing process'

On The Web

• Lenovo

Site Search

“So right now, we should emphasize China and emerging markets and consumer customers.” – Lenovo Chairman Liu Chuanzhi

MORRISVILLE, N.C. — William Amelio’s departure as chief executive officer at Lenovo and his replacement by Chairman Yang Yuanqing can hardly be good news for the U.S. operations of the world’s No. 4 PC-maker.

Here’s why: Lenovo is losing market share and money, plus it is under increasing competitive pressure in its homeland – China.

So where do companies in trouble look to cut? Redundancies. Lenovo maintains two large headquarters operations – a three-building campus in Morrisville that’s hardly broken in plus an operation in Beijing.

Lenovo already has announced plans to cut its work force by 10 percent. What other cuts could be in the offing as the global economy continues to spiral downward?

Despite the fact that Yang maintains a home in the Triangle, consider these facts that don’t bode well for North Carolina:

One: The new chairman, Lenovo co-founder Liu Chuanzhi, is in control now, not Yang.

Two: Liu made clear in an interview with The Wall Street Journal that China will be Lenovo’s focus. “In the current economic crisis, corporate customers have been the most affected,” Liu told the Journal. “So right now, we should emphasize China and emerging markets and consumer customers.”

Three: From chairman to CEO is not a promotion for Yang.

Four: Lenovo’s cost structure still includes a lot of major salaries for IBM executives and workers who came on board when Lenovo bought Big Blue’s PC business four years ago. From North Carolina to Japan, there certainly are a lot fewer Blue Bloods than right after the acquisition, due to layoffs and attrition. But still, numerous media reports have noted that the difference in pay remains a right not yet bridged in the company.

Over the past 18 months or so, Yang and Amelio, who is a former IBM and Dell executive, tried to transform Lenovo into a consumer-oriented company. Lenovo expanded aggressively both in distribution reach and in marketing, from Formula 1 to soccer to the Olympics and the NBA to a host of new consumer-oriented laptops.

However, despite new products and marketing, Lenovo lost market share and turned in a poor quarterly earnings report that set the stage for Amelio’s departure and Wang’s change in roles.

Lenovo did name former IBM exec Rory Read as president and chief operating officer. But whether that move was window dressing or reflects a genuine commitment to Lenovo’s IBM heritage and North Carolina presence remains to be seen.

The Skinny

WRAL Local Tech Wire Publisher and Editor Rick Smith dishes out tidbits from the local technology sector. Read more articles…