The CEO of Lenovo, William Amelio, has resigned following the announcement that the company has experienced heavy financial losses as a result of a slump in high end commercial computer sales.
Amelio will be replaced by Yang Yuanquing who will step down as Chairman and take on the role of CEO, a position he held before between 2001 and 2004.
The company’s founder and former Chairman Liu Chuanzhi will take up the position of Chairman again and Rory Read, Lenovo’s Senior Vice President of Global Operations will take on the newly created role of President and Chief Operating Officer.
The company saw losses of $96.7 million on revenue of $3.6 billion in the 3 months leading up to December which was worse than many analyst forecasts. If we compare that to the year before they reported a profit of $173 million on revenue of $4.5 billion for the same period.
The growth of the company has also slowed down, last year they showed only an 8% growth, the smallest out of the top 4 computer manufacturing giants. Acer on the other hand grew by 53%, HP by 13% and Dell by 11%.
Lenovo blamed a slow down in the demand for PCs in China for the drop in sales along with a general reduction in the PC segment globally. China is Lenovo’s major market accounting for 45% of their business in the last quarter.
Liu Chuanzhi told a news conference “with the changes in the macroeconomic environment, our business in EMEA and the Americas has been impacted greatly so our company is increasing its focus on China, as well as emerging markets”.
Lenovo is currently the world’s 4th largest computer manufacturer but in an uncertain economy, businesses have to take action to stay in the game so Lenovo are taking the necessary steps to ensure that their business operates as efficiently and effectively as possible, and continues to grow.
Part of their restructuring plans to put the company back on track include cutting executive pay, consolidating its China and Pacific Asian operations into a single division and getting rid of 2,500 jobs across the globe. Lenovo expect this to save them $300 million before March 2010.
Like many other companies before them and no doubt many more to come, Lenovo have been deeply impacted by the global economic turmoil and can expect difficult times in the months ahead.
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