(Photo : Lenovo Booth)

On the third day after Yang Yuanqing, CEO of Lenovo, personally rewarded lower-level employees with 3 million US dollars, rumors came that Lenovo was planning huge staff cuts. According to "World Enterprise", a finance program of China National Radio, a staff member in Lenovo revealed that Lenovo would cut 10% -15% staff in September, 2013. "The rumor is not true," said a related representative of Lenovo, denying the rumor, on September 4th.

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Rumor says 5200 staff will be laid off

According to the previous reports, a staff member in Lenovo revealed that Lenovo was planning huge staff cuts right now, which might be executed in September. The proportion of the staff to be laid off is expected to be 10% - 15%. It was not clear in the reports whether the staff cuts would be global or local in Chinese mainland. According to Lenovo's annual report, up to March, 31st, 2013, there are 35,000 staff members in total in Lenovo. Therefore, about 5200 staff will be laid off accordingly.

On September 4th, a related representative of Lenovo announced that the rumor was not true and Lenovo never had a plan of cutting staff. It is said that Lenovo will investigate into the rumor and response to the public by a written statement.

There have been four huge staff cuts in Lenovo's history. In 2004, before the merger and acquisition of IBM PC service, Lenovo laid off 600 workers, which accounted for 5% of the total staff population. In 2006, Amelio, new president and CEO, announced staff cuts of 1000 workers, covering 5% of the total staff population. In 2007, Lenovo announced that 1400 workers would be laid off in the other three regions except its greater China region. In 2009, Lenovo carried out the project of "Resource Allocation" and cut 2500 staff globally, which accounted for 11% of the total staff population.

Sufficient staff support needed for intelligent terminal business

Lenovo's latest quarterly report shows that, in the first quarter of 2013, Lenovo's net profit increased by 23% from the same period last year, reaching 0.174 billion US dollars. In light of the statistics published by International Data Corporation, Lenovo exceeded HP and became the world's biggest maker of PCs by shipments.

According to "World Enterprise", Lenovo is now transferring its global market's focus to mobile end system. Compared with HP and other PC makers, Lenovo is low-margin business. Therefore, in terms of cost control, human cost is one of the major factors to take into consideration.

However, Lenovo's representative pointed out that, since Lenovo is transforming its business to PC+ and its intelligent terminal business is now being well developed, Lenovo needs sufficient staff to support its intelligent terminal business.

It is learned that Lenovo stock dropped 1.45% on September 4th, 2013.