Lenovo financials miss targets; job cuts planned

Lenovo has announced its Q2 financial results, and while the company posted a profit, it's looking to cut costs. The world's largest PC maker reported net income of $105 million on $10.7 billion in revenues, which represents a 51% decline year-over-year. According to Reuters, revenues missed analyst targets by $600 million.

The company reported that its biggest challenges came from the PC market, where Gartner and IDC both predicted fewer units would be sold this year, and in the tablet market, where Lenovo is a relatively small player compared to Apple and Samsung. Additionally, Lenovo faced stiff competition in China's smartphone market, and currency fluctuations in Brazil and Latin America posed problems for the company's Motorola division.

To right the ship, the company announced vague plans to cut costs and release fewer smartphone models. Reuters has some of the details, saying that the company will cut 3,200 non-manufacturing jobs. The cuts would initially cost Lenovo $600 million, but the company believes it would save $1.35 billion annually thereafter.

Reuters also says that the Motorola acquisition hurt Lenovo this quarter, as Lenovo's mobile division lost $300 million. Still, Lenovo CEO Yang Yuanqing told Reuters acquiring the smartphone maker from Google for $2.91 billion was the right call. "I still believe this acquisition (Motorola) was the right decision," he said in the interview. "Except Apple and Samsung there is no third strong (global) player. I believe that will be Lenovo."

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