Retail in Asia

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Lenovo faces Motorola hangover, cuts 3,200 jobs as sales slide, profit tumbles

China’s Lenovo Group will lay off 10 percent of white-collar staff after sales of Motorola handsets fell by a third, raising doubts over the personal computer giant’s bet that a money-losing brand it bought for nearly USD3 billion will help it become a global smartphone leader.

Shares in the world’s biggest maker of PCs slid nearly 9 percent on Thursday after it said its quarterly net profit was halved as its mobile division lost nearly USD300 million. Lenovo, which uses the US dollar in operations rather than the recently devalued Chinese yuan, said it plans to cut about 3,200 non-manufacturing jobs with a one-time cost of USD600 million.

Beijing-based Lenovo said the restructuring would yield savings of about USD1.35 billion on an annual basis. But the difficulty in selling handsets, combined with a continuously shrinking global market for PCs, meant the firm was facing its "toughest market environment in recent years", Chief Executive Yang Yuanqing warned.

(Source: Jakarta Globe )