Lenovo to Cut 2.5% of Workforce in Global Realignment

Lenovo announced yesterday it plans to reduce its workforce by 1,400 or about 5%, but half of those positions will be "transitioned into emerging markets closer to Lenovo’s suppliers and manufacturing operations" over the next twelve months. It expects savings of approximately $100 million through its fiscal year ending next March. Lenovo said it will take a $50m - $60m restructuring charge for the quarter ending in June. Separately, a newswire report carried on Forbes.com said Lenovo led Q1 PC sales in Asia ex-Japan, with a 24.3% y-o-y increase for 17.8% market share, followed by HP at 15.4%, Dell at 8.1% and Acer at 6.5%, according to preliminary data from IDC. Another newswire said data from Gartner showed Acer (6.8% market share) overtook Lenovo (6.3%) to become the world's 3rd ranking PC vendor in Q1 (#1 HP 17.6%, #2 Dell 13.9%). Lenovo's ADRs trading on the pink sheets closed yesterday unchanged at $7.25, on about 3x normal volume of 135,000 shares.

Sources: Press release, Forbes.com XFN-Asia newswire [i, ii], The Wall Street Journal
Commentary: Dell #1 PC Seller for 2006 • Chinese Tech Stock Weekly -- Lenovo Expects Higher Q4 Revenues from Vista Launch • Lenovo to Pre-load Microsoft Live Tools
Stocks/ETFs to watch: Lenovo (LNVGY.PK). Competitors: Hewlett-Packard (HPQ), Dell (DELL), Gateway (GTW)

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