Lenovo Lays Off Hundreds Of Employees, Impacts Motorola Significantly

Tech giant Lenovo has laid-off hundreds of its employees for the second time in two years, with a majority of them belonging to the Motorola Smartphone wing. The company did not reveal any reports of the layoff; however, Motorola is to take a major portion of the hit, with more than 50 percent of the firm's existing workers in the US losing their jobs, according to a recent report from Droid Life-a website that focuses on Android-related stuff. The layoffs will impact less than 2 percent of the company's 55,000 global employees, says Lenovo.

In its present round of lay off, the company eliminated 1,000 employees, with the majority of the positions being part of the running strategic integration between Lenovo and Motorola Smartphone business. It was in 2015 when Lenovo laid off 3,200 workers after a drastically poor quarter of business. The reasons behind this decision as cited by the company were a decline in the demand for PC, enormous Smartphone competition along with currency fluctuations that led to an ambience of a perfect storm.

The world's largest PC maker is trying hard to diversify into the Smartphone business as sales growth for its laptops and desktop PCs is in a decline mode. The company's low-end phones boomed in the initial days; however, their sales dived significantly because of enormous competition and a dearth of loyalty from customers. Lenovo had high hopes on Motorola Mobility when it acquired the company two years back for a staggering amount of $2.9 billion from Google, with the objective of ascending the value chain by creating expensive and higher margin phones. Sadly, its efforts went in vain.

One of its employees said that this lay off is part of an ongoing pattern in which the company is shifting base to China. Lenovo denied these claims and stated that it remains committed to keeping the headquarters of Motorola Mobility in Chicago.