Sources: Lenovo laying off 20% of server group employees in RTP

RESEARCH TRIANGLE PARK – Lenovo’s Data Center Group, which is based in Research Triangle Park, is laying off 20 percent of its workforce, sources say.

The job cuts will affect some 200 employees in the Triangle and additional employees at operations elsewhere.

Lenovo confirmed making 500 layoffs but said they were spread across the company and included jobs in the data group as well as its Morrisville headquarters.

WRAL TV and WRAL TechWire both received tips about the cuts. Lenovo employees also have posted reports at the jobs site Layoff.com that the job cuts are being made today.

Lenovo lays off 500 workers, including jobs in RTP, Morrisville

“Lenovo is set to cut 20% of their DCG workforce today (some of which has already begun overseas),” a source told WRAL TechWire via email. “Roughly 200 people here in RTP will be affected.”

The information was supported by a second tip.

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“This is essentially a cost-cutting measure,” said a source within Lenovo who requested not to be quoted by name. The new cuts follow a “reduction in force” last October and another “massive cut” in 2017, the source said.

The layoffs are described as a “resource action,” a term used for layoffs at IBM.

The Lenovo Center Group is built in part around the x86 server business of IBM which Lenovo acquired in 2014.

The layoff reports come after Lenovo reported strong revenue growth and profitability for its fiscal year. The Data Center Group was among the units cited for producing the performance.

Yet as one worker posted at Layoff.com shortly after the earnings report:

“The hypocrisy from the VP’s is incredible. They sent out the wonderful earnings communications this morning and next week we have significant layoffs. I cannot believe the hypocrisy.”

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In the email to WRAL TechWire, the source pointed out:

“[Data Center Group] had its 6th profitable quarter in a row and, if what was said at [a Lenovo annual] kick-off [event] is to be believed, will DOUBLE their revenue in this new fiscal year to close to 4 billion dollars.”

Rumors about the job cuts have circulated for several months, according to the posters at Layoff.com.

“You have to really appreciate Lenovo’s corporate transparency on layoffs,” a posted said. “We never know if we have a job tomorrow.”