Changes in the world’s PC market that are driving down sales is having an impact in the Triangle.

Confirming reports to WRAL about layoffs being made at the executive headquarters of Lenovo, a corporate spokesperson said the job cuts and said they were made as part of the transition of the world’s No. 2 PC maker toward a more diversified lineup of products.

“While is extremely difficult for us to make changes like this, particularly when the company is doing well, it is absolutely necessary for us to ensure our long-term success,” Ray Gorman, executive director of external communications at Lenovo, told WRAL News.

On Thursday, Lenovo discloses its most recently quarterly earnings as it ramps up smartphone sales with a target of 60 million units this year and just last week formally launched its Yoga laptop/tablet device that can separate into two units while also unveiling huge, stylish tabletop PCs that can be incorporated into pieces of furniture. Lenovo has so far managed to continue to increase PC sales while those of its competitors have suffered, but that fact has not eased concerns within corporate management about the sweeping changes taking place across the industry. 

Lenovo Chairman and CEO Yang Yuanqing describes the strategy as “PC Plus,” one in which the company relies less on PCs while selling more Internet-connected devices such as tablets, smartphones, servers and smart TVs. Yet at the same time Lenovo remains focused on toppling HP as the world’s No. 1 PC maker and growing computer sales even as the global market slows.

At a recent kickoff meeting in Raleigh for the new fiscal year, Yang warned some 3,000 Americas employees that the company would face challenges as consumers and businesses shift interest toward non-PC devices.

“So team, in the coming year we must weather through the storm,” he explained. “At the same time, PCs are still our bread and butter.

“I expect us to maintain our growth in sales, in shipments and in profits.”

Noting those economic realities, Lenovo made “some” cuts in full-time and contractor staff last week, Gorman said. The company employs some 2,000 people in North Carolina with most of those working at Morrisville.

However, the number was “small enough” that the total won’t be disclosed, Gorman added.

No layoffs were reported at the North Carolina Department of Commerce where substantial job cuts must be reported under the federal Worker Adjustment and Retraining Notification (WARN) Act.

Even as the cuts were made in Morrisville, the company has been adding jobs as it ramps up PC production in the U.S. through a recently opened manufacturing line at its distribution center in the Triad. Some 115 jobs are expected to be added this year.

Gorman also pointed out that Lenovo has increased its work force in North Carolina “by a third” mover the past five years as it grew the Morrisville campus to three buildings from two and expanded the Triad center. 

Lenovo bought IBM’s largely Triangle based PC division in 2005 and used that acquisition to virtually tie, if not pass, HP as the world’s No. 1 PC producer. 

In explaining the job cuts, Gorman pointed out the changing business and the adjustments Lenovo is making.

“As you know, the latest figures have shown that growth in the PC industry, which is approximately 90% of our business, has slowed dramatically,” he explained. “The technology shifts that are re-shaping our industry … tablets, convertibles, smartphones, etc. are fueling growth at a faster pace than traditional PCs.

“To help meet these shifts in our industry, achieve our goals and beat market expectations, we need to continue to invest in these high-growth areas, what we call PC Plus, while reducing our expenses and cost structure, especially in areas with slower growth.”

Gorman said cuts affected contractors and employees.

“We took action  to eliminate some contractor positions and reduce staffing levels in certain functions at our Morrisville headquarters to help decrease expenses in areas that are being impacted by the shift in industry growth from traditional PC to PC Plus,” he noted. “The staffing reductions are limited to roles that are no longer required as we rebalance our skills, function by function, department by department to focus more on our PC Plus strategy. It’s a small enough number that we will not be announcing or reporting it.”

Gorman also said Lenovo still expects to grow its North Carolina presence.

“While is extremely difficult for us to make changes like this, particularly when the company is doing well, it is absolutely necessary for us to ensure our long-term success. Historically we have anticipated trends and planned well for the future, and on balance we have been adding jobs in NC: moving a call center here from Toronto, moving support jobs here from India, adding jobs and opening a manufacturing site at Whitsett,” Gorman said.

“Since 2008, we’ve grown our employee population in NC by a third, and this [decision] won’t change that. We will continue to invest in new skills and new jobs in NC.

“This is rapidly changing market, so we must continue to reduce costs where have to, invest where it fits our strategy and run our business as efficiently and as effectively as possible to both meet our short-term challenges, and ensure our future growth. Our commitment to the Triangle and to NC remains strong, and that will not change.”

[LENOVO ARCHIVE: Check out eight years of Lenovo stories as reported in WRALTechWire.]