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Due to the reduction in the market for electronics globally, China’s Lenovo revenue reported a 24% decline for the third quarter, its greatest sales decline in 14 years, and announced plans to reduce spending and modify its personnel.

The largest PC manufacturer in the world reported on Friday that its overall revenue for the three months ending in December fell by 24% to $15.3 billion from the same period last year.

The outcomes fell short of a $16.39 billion average Refinitiv estimate compiled by seven analysts.

As more people chose to work remotely and upgraded or replaced their equipment due to the COVID-19 outbreak in 2020, Lenovo and its competitors saw a significant increase in electronic sales globally.

Lenovo’s revenue, however, began to decline in the quarter between July and September of last year as a result of a decline in demand.

As the business reported its financial results, Lenovo Chief Executive Officer Yang Yuanqing stated on an investor call that the PC and mobile markets overall had seen a “serious slump” in the previous quarter and that the company was seeking to cut costs and boost productivity.

Wong Wai Ming, the company’s chief financial officer, noted that Lenovo wants to cut its run-rate operational costs by about $150 million in order to meet a medium-term objective of doubling net margin.

“This includes an overall reduction in operating spending as well as workforce adjustments when necessary and appropriate,” he added.

Wong did not go into detail regarding if this would result in layoffs.

Competitors Dell Technologies and HP have both announced workforce reductions. HP anticipates eliminating up to 6,000 positions by the end of fiscal 2025, or about 12% of its global staff, while Dell stated it will eliminate roughly 6,650 employees or 5% of its global workforce.

The quarterly net income attributable to shareholders of Lenovo fell 32% to $437 million. On Friday, Lenovo’s Hong Kong stock fell 3.14%.

Shipments of PCs and mobile phones are probably going to decline in 2023 for the second year in a row, according to IT research firm Gartner’s report released last month.

According to Gartner, PC shipments are expected to decline 6.8% this year after dropping 16% in 2022.

According to Lenovo, the market was now processing an abundance of inventories, which may take another quarter or two.

However, according to Yuan, statistics on device activations, the true demand was not as bad as it would have seemed.

You will start to see the PC market increase again in the second half of the year, he predicted.

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