Lenovo’s recovery triple play: Reignite PC growth, boost other revenues, step up tech recruiting

RESEARCH TRIANGLE PARK – Lenovo’s chair and CEO Yang Yuanqing has aggressive plans in mind to rally the world’s top PC seller after a weak quarter to end 2022 ignited moves to make nearly a billion dollars in spending cuts and make “workforce adjustments.”

While not described as such, the strategy is a triple play built around:

Reigniting growth in its PC business
Boost growth in its non-PC services
Continue to hire more talent to boost research and development efforts

The plans were disclosed on Thursday, reported China Daily.

Most Lenovo operations are located in China as is its primary headquarters (Beijing). Its second HQ is located in the Triangle.

Layoff watch is on at Lenovo after huge drop in global PC sales

‘Long-term opportunities’

Yang’s comments came after global PC sales plummeted worldwide for Lenovo and other industry leaders. Despite diversification efforts led by Yang into non-PC smart devices, servers and supercomputing, computers remain its revenue core. Lenovo revenues fell by more than $1 billion below expectations last quarter.

Lenovo also recently confirmed that it is stopping production of smartphones geared for gaming. And the company confirmed recently some job cuts.

But Yang is optimistic, China Daily reported;

“While the industry faces significant macroeconomic pressures, Lenovo said it sees long-term opportunities ahead as the global trends of digitalization and intelligent transformation continue accelerating and IT spending is expected to recover to a moderate growth rate in the mid-to long-term.”

Yang also continues to champion the hiring of talent to drive future product and technology development.

The company has added 8,800 R&D related jobs, China Daily noted.

Positive spin follows cuts

Just weeks ago, Lenovo said it was looking to cut expenses by $850 million, according to Chief Financial Officer Wong Wai Ming.

“The group continues to further strengthen its cost competitiveness to achieve its medium-term goal of doubling net margin. We will do this by investing in high-margin growth engines and taking proactive steps to reduce run rate operational expenses by approximately $850 million. This includes overall reduction in operational spending, as well as workforce adjustments, where necessary and appropriate,” he said in a conference call with analysts.