Lenovo to Lay Off 1,000 Employees Due to Structural Integration with Motorola

In a statement released by Lenovo, about 1,000 employees will be laid off. The company wants to further slim down its workforce overseas as the company merges operations with Motorola.

Lenovo did not give details of the layoff but specified that the company has plans to optimize its smartphone manufacturing operations. In 2004, Lenovo bought Motorola from Google, Inc. for $2.8 billion.

According to the statement, "The majority of the positions being eliminated are part of the ongoing strategic integration between Lenovo and its Motorola smartphone business as the company further, aligns its organization and streamlines its product portfolio to best compete in the global smartphone market."

There were also rumors that Lenovo will be moving their operations away from Chicago.

To this, the company said, "Lenovo is absolutely committed to Chicago and we plan to maintain our Motorola Mobility headquarters there. Chicago has a well-deserved reputation for technical excellence and as the hub of our global R&D for our smartphone business we expect to take advantage of local talent to continue developing Moto products there."

The layoff accounts for 2 percent of Lenovo's global workforce which has a total of 55,000.

Telecom expert Xiang Ligang said, "I think it is a good move. Lenovo should have done it earlier. Apart from cutting costs, eliminating some jobs could also help align the organization and improve efficiency."

Another expert believes that slimming down the workforce is not enough for Lenovo to revive its smartphone business. The company has been losing market share to other local manufacturers like Oppo and Huawei, according to statistics from Gartner Inc.

"The China market accounts for one-third of the world's total smartphone market, while Lenovo has been losing market share to domestic rivals such as Huawei and Oppo," said James Yan, research director at Counterpoint Technology Market Research.