RESEARCH TRIANGLE PARK – Following a plunge in global PC sales at the end of 2022, Dell announced this week that it would cut about 5% of its workforce, an estimated 6,500 jobs. Last November, HP – the other member of the top three PC seller group – said it was cutting thousands of jobs. Is Lenovo, the world’s largest PC seller which operates a large campus in Morrisville, next?

A spokesperson for the company told WRAL TechWire said it remains “well positioned for further growth.”

Lenovo, which operates dual headquarters in Beijing and Morrisville, confirmed in a statement sent to WRAL TechWire in December that the company had laid off some workers in December. But it denied that the round of layoffs approached 10% of its workforce, as reports suggested could be the case.

If Lenovo is able to avoid more layoffs, diversification of its product mix could be a primary reason. In its financials report last November, the tech conglomerate noted that PCs represented just over 60 percent of its revenue base – a decline launched several years ago by Chairman and CEO Yang Yuanqing. (A year earlier, the PC-focused business accounted for some 80% of revenues, Lenovo financials show.)

After acquiring Motorola’s smart phone business and IBM’s lower-end server group in 2014, Yang chose to invest in the emerging Internet of Things smart device market and, later, services. Yang also has committed Lenovo to aggressive growth in research and development investments. Yet he has stressed Lenovo’s “bread and butter” would remain PCs.

A huge question now is: Has growth of the non-PC businesses continued?

Lenovo, which emerged as a PC and tech giant after acquiring IBM’s PC business in 2005, will report quarterly earnings later this month.

Personal computer sales ‘collapse’ but Lenovo keeps top spot

Fallout from plunging PC sales

A report from Gartner released in early January 2023 found that Lenovo shipments plunged by nearly 29%, dropping to 15.6 million units shipped out worldwide during the fourth quarter.

But Dell’s PC shipments fell even more, by 37%.  This week, Dell cited the “challenging global economic environment” for making job cuts.

In a letter that was sent to all Dell employees, Jeff Clarke, the firm’s vice chairman, described steps the company has already taken, but then said such steps were insufficient.

“What we know is market conditions continue to erode with an uncertain future,” Clarke wrote. “The steps we’ve taken to stay ahead of downturn impacts — which enabled several strong quarters in a row — are no longer enough. We now have to make additional decisions to prepare for the road ahead.”

Lenovo, however, remains optimistic.

A spokesperson for Lenovo told WRAL TechWire that “while the PC market is clearly under pressure, all industries go through cycles, and looking long term, we expect the market to return to higher than pre-pandemic levels.”

The spokesperson declined to comment on layoffs, either ones already made in December or whether cuts were under discussion or could be announced this month.

“At Lenovo, we have diversified our growth engines as part of our wider transformation over the past few years, meaning we are well positioned for further growth in many areas including server, storage, solutions and services,” said the Lenovo spokesperson.

Tech giant Dell slashing thousands of jobs, saying ‘market conditions continue to erode’