Rick Osterlog, the president of Motorola, will be the leader of Lenovo’s smartphone businesses under a reorganization plan the global tech giant says. However, the company will maintain two brands and Lenovo executive Chen Xudong remains leader of the Lenovo Mobile Business Group.
Lenovo confirmed the changes in its smartphone business in a statement provided to WRAL TechWire, which had reached out to Lenovo seeking clarification about what exactly was going on in the mobile group. Media reports and a blog from Chen raised numerous questions about management, organization, and leadership.
“Effective immediately, Rick Osterloh, formerly president, Motorola, will be the leader of the combined global smartphone business unit,” Lenovo said.
“Osterloh will continue to report to Chen Xudong, senior vice president, and president, Lenovo MBG.”
(By the way, no Triangle-based employees are affected by the changes, according to Lenovo spokesperson Ray Gorman.)
The reorganization of Lenovo’s smartphone business follows the report of substantial losses in the Motorola business as well as lagging smartphone sales. Lenovo acquired Motorola Mobility last year for nearly $3 billion. Lenovo decided to cut 7 percent of its work force, or 3,200 workers. Among the cuts were more than 200 in the Triangle and a 25-percent cut in Motorola’s work force at its Chicago headquarters.
However, in a change from earlier reports, Lenovo said it would maintain a Lenovo smartphone brand as well as the Motorola brand. Chen also had said in the blog that two brands would continue although last week in India he was quoted as saying there eventually would be one.
“Under our new organization, we will continue to drive both Lenovo and Motorola branded smartphone growth across the world. We will deliver both brands to meet market needs in different countries and for different customer segments,” Lenovo said.
Motorola also will take more of a leadership role in smartphone design, Lenovo added.
“MBG will continue to drive Lenovo’s overall mobile business, but will now rely on Motorola team-mates to help design, develop and manufacture smartphone products,” the statement said.
Lenovo explained that the changes are being made due to “tough markets and results that missed expectations.”
The company says the reorganization is part of a plan that includes “broad, decisive actions to realign businesses, cut costs and return to sustainable, profitable growth.
“Specifically, Lenovo is restructuring its Mobile Business Group (MBG) to align smartphone development, production and manufacturing and better leverage the complementary strengths of Lenovo and Motorola to quickly drive growth. To create a faster, leaner business model we will leverage our global sales force across Lenovo, and will accelerate the work already well underway to maximize efficiency in our global supply chain. “
Xudong was made head of Lenovo’s Mobile Business Group on June 1.
Lenovo, the world’s No. 1 PC manufacturer, operates its global executive headquarters in Morrisville.