Lenovo Layoffs 2020: Some Data Center Business Group Staff Cuts
Lenovo has laid off some data center business group employees, though the exact number of job cuts has not been disclosed. WRAL TechWire, a technology news site for Research Triangle Park, North Carolina, reported the cuts.
The Lenovo layoffs apparently did not impact the hardware giant’s PC and smart devices group, the report said.
Lenovo confirmed cost cuts to Bloomberg, though the company declined to say if the cuts involved layoffs.
Lenovo Data Center Group: Business Performance
Lenovo’s data center group revenues declined 8.7 percent in the quarter ended March 31, 2020 amid “softer Hyperscale demand and significant commodity price declines, but non-hyperscale revenue grew 5.3 percent year-on-year,” the company disclosed on May 19, 2020.
Despite the staff cuts, it’s a safe bet Lenovo will continue to invest in its data center business. Indeed, the company ranks among the top 5 server vendors worldwide, holding 5.6 percent of the market as of Q4 2019, according to IDC. Still, the group hasn’t been growing. Lenovo’s Q4 2019 server revenue was $1.42 billion — down about 2.6 percent from the corresponding quarter in 2018, IDC estimates.
To move the business forward, Lenovo in early 2020 hired Steve Biondi as head of partnerships and channels for the North America Data Center Group.
Data Center Hardware and PC Sales Amid Coronavirus Economy
The overall desktop, server and data center hardware market is in flux amid the coronavirus pandemic — which has triggered dramatic shifts toward Work From Home (WFH) and cloud-based workloads.
Among the financial metrics to note:
- Dell Technologies revenue was flat in its first quarter of fiscal 2021, the company disclosed on May 28, 2020. Dell’s results were particularly strong compared to recent earnings from numerous hardware rivals.
- HP Inc.’s revenue fell 11 percent in fiscal Q2, the PC and printer maker disclosed on May 27, 2020. HP Inc. blamed with revenue weakness on supply chain issues.
- Hewlett Packard Enterprise’s revenue fell 16 percent in Q2, the data center hardware provider disclosed on May 21, 2020. HPE blamed the weakness on “global economic lockdowns.
Technology Industry Layoffs, Salary Cuts
Multiple hardware and software companies have cut staff amid the coronavirus pandemic and associated economic fallout. The cuts have stretched from enterprise giants like IBM to Silicon Valley disruptors like Cohesity.
Meanwhile, companies such as Dell, VMware and OpenText have cut executive compensation and other expenses amid the pandemic.