PC sales fell significantly in 2022 after the boom that occurred in 2020 and 2021 due to the pandemic.
This phenomenon is hitting the main manufacturers, like Lenovo, the company that was born in 1984 as a small startup in Beijing, China, and that over time became a tech giant.
Lenovo, which saw the light under the brand Legend Holdingswas founded by Liu Chuanzhi, who along with a group of 10 engineers, started with only $25,000 in capital.
Legend Holdings, two decades later, went on to produce its own line of personal computers. Around this time, the company changed its name to Lenovo and entered the global market by acquiring IBM’s PC business.
This acquisition propelled the Chinese brand into the international spotlight and cemented its position as a major player in the technology industry.
Lenovo’s key markets are China, the United States and Europe. In its home country, in fact, it is the largest PC manufacturer, with a market share of more than 45 percent.
In the United States, meanwhile, it is the fourth largest PC vendor, behind Dell, HP and Apple.
In Europe, for its part, it has a strong presence in Germany, the United Kingdom and France.
In 2020, Lenovo reported revenue of $50.7 billion, up nearly 3 percent from a year earlier, in part due to higher sales during the pandemic.
PC sales: Lenovo in trouble, like Dell and HP
But things have changed since 2020. Lenovo Group reported this Friday, February 17, 2023, a 24 percent drop in revenue in the third quarter, its biggest decline in those numbers for almost 15 years.
The cause: the sharp decline in global demand for electronic products.
The world’s largest PC maker said its total revenue for the October-December quarter reached $15.3 billion, a far cry from the $16.39 billion the market was expecting.
As we said before, the pandemic generated a strong boost in sales for Lenovo and its rivals around the world, since a large number of people had to work home office and replaced or updated their equipment.
However, demand began to fall, and Lenovo’s revenues plummeted.
Lenovo CEO Yang Yuanqing spoke of a “serious decline” in the last quarter, lamenting that the company will need “reduce expenses” and “improve efficiency”.
When Yuanqing talks about “improving efficiency,” he means a workforce adjustment plan that will be carried out “when necessary and appropriate,” he said.
One of Lenovo’s rivals, Dell Technologieshas already announced layoffs, the same as HP.
Dell said it will lay off 6,600 employees, 5 percent of its global workforce. HP, meanwhile, expects to cut some 6,000 jobs by the end of 2025, 12 percent of its workforce.
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