RALEIGH – Lenovo assembled some 1,000 of its troops on Tuesday to kick off its series of annual team meetings around the world – and they heard words meant to reassure them from CEO and Chair Yang Yuanqing.

“We have passed Lenovo’s most difficult period,” Yang said.

Looking ahead, Lenovo must like a “beast” that has been starved, so that “we can pounce and make gains,” Yang said, according to Caixin Global.

Known to employees as YY, Yang sought to reassure the team after a year in which the global tech giant lost its hold on the world’s No. 1 PC seller status to HP and continued to suffer through tough times in the other two key segments: Mobile as well as x86 servers, a business unit that is based in the Triangle.

Lenovo also has endured a series of management changes, including the naming of another new North American executive – the latest in several changes over the past six years. Matthew Zielinski, a longtime executive at chip manufacturer AMD, became Lenovo’s new president for North America as of Feb. 12.

In addition to naming a new head of its Motorola unit in Chicago, Lenovo cut jobs at the smartphone technology group. Those layoffs were part of a “less than 2 percent” global reduction in the company’s workforce, Lenovo sad.

Yet the company continues to introduce new products, including artificial intelligence-equipped smartphones in China, is investing heavily in artificial intelligence as well as virtual reality, and recently announced plans to open a series of retail stores across China. Yang also said in Raleigh that the company was seeing momentum in the Americas where it has performed well in mobile across Latin America. However, PC sales in North America – once a growing strength for the company – have lagged.

Is YY feeling pressure?

Just last July, Yang also dropped hints that he might resign if Lenovo didn’t hit certain sales targets.

“I don’t want to step down. I’m confident we can achieve that. That’s not something worrying,” Yang told Bloomberg.

“Investors should have more patience. If you want to see the result, it will take time.”

Positive signs

In its latest earnings report on Feb. 1, Lenovo did have some positive news. Its revenues climbed to a three-year fourth quarter best of $12.94 billion to close out 2017 but it still took a $289 million loss after taking a $400 million charge it linked to changes in U.S. tax law.

And in another sign of positive news, Lenovo server sales were strong in the fourth quarter, perhaps signalling a revival.

But on Feb. 28 one analyst who follows Lenovo declared that a downward spiral may not be over.

Bloomberg News even noted that Lenovo founder and chair of Lenovo’s parent group was pessimistic.

“How many mistakes have we made? How many mistakes have I myself made?” said Liu Chuanzhi. “Without question, today’s Lenovo Group faces severe and acute challenges. The challenge is multi-dimensional and uncertain. It’s an age when innovations in technology and business model are powerful enough to overturn an industry and even social customs.”

Many of Lenovo’s struggles date back to its multi-billion-dollar acquisitions of Motorola Mobility from Google and the x86 server business from IBM in 2014.

Four ‘battles’

On Tuesday Yang took the stage, according to a Chinese media reporter attending the event, chose to accent the positive.

“In the future, we must not only develop forward but also develop upwards,” Yang said, according to reporter Han Dapeng of Lieyunwang.com.

Yang spelled out four points of emphasis for 2018 in what a slide described as “battles:”

  • PC: Return to #1 without compromising profitability
  • Mobile: Become a healthy business
  • Data center: Become a profitable, sustainable, growth engine
  • AI (artificial intelligence): Build a competitive edge

However, an English translation of Han’s report spells out some of the challenges Lenovo faces in its mobile business group:

“The person in charge of the overseas business of the mobile business group stated that the mobile business has achieved good results in Latin America and other regions, but it also faces many problems, such as the strategy is too complicated and there is no focus. In the coming year, MBG overseas has three goals: the first is to spend less than 500 million U.S. dollars; the second is to reduce the complexity of business; the third is to invest in key markets; the fourth is to focus on consumers, and strive to enhance the word of mouth.”

Lenovo will have other kickoff events over the next two weeks in Athens, Beijing and Tokyo. The company operates two headquarters – one in Morrisville and the other in China’s capital.

Read more from Han online.