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Lenovo Loses $714 Million

Are They On Their Way to Bankruptcy?

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Lenovo Loses $714 Million

PC sales also dropped 17 percent from last year which is certainly raising some red flags

Lenovo is one of the most trusted names in the PC business but as they delved into the mobile market, they tell a different tale. With at least $300-million worth of unsold phones and their $2.9 billion acquisition of Motorola last year, Lenovo experienced a $714 million net loss--a first for the company in six years.

Their PC sales also dropped 17 percent from last year which is certainly raising some red flags as this is their original turf. Thankfully even their competitors had experienced almost the same drop in sales. Ironically, their overall sales is actually better than last year's with $12.2 billion.

To lessen expenses and generate profit, Lenovo is letting go of around 3,200 jobs

As they also looked for ways to lessen expenses and generate profit, Lenovo is letting go of around 3,200 jobs. This will help them save at least $650 million this year. Admittedly, the company knows that they're facing quite a tough market environment compared to previous years. However, they're still quite confident about their decision of buying off Motorola.

In fact, outside of China, Lenovo's smartphone sales jumped from 19 percent to 70 percent, which is pretty impressive. An increase of 11 percent compared to last year's total mobile sales earned them 2.7 billion which made them quite confident in the game. Lenovo is still pretty optimistic that soon enough, their mobile efforts will produce better numbers especially with the Motorola brand under their belt.

 

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