Lenovo campus to lose 100 jobs

PC maker Lenovo, faced with declining customer demand and eroding market share, is eliminating 250 jobs at its Morrisville campus as part of a companywide cost-cutting effort.

At the same time, however, Lenovo plans to create 150 jobs in Morrisville, by relocating its call center operations from Toronto, said spokesman Ray Gorman. The net reduction of 100 jobs will leave Morrisville with 1,550 jobs.

"We are reducing positions in North Carolina, [but] we also are adding positions in North Carolina," said Gorman. "What I hope this demonstrates is that we do remain committed to the state of North Carolina."

The Chinese company, which has one of its world headquarters in Morrisville, announced late Wednesday that it would cut 11 percent of its work force, or about 2,500 jobs. The cuts come as demand for electronics slump amid a global economic downturn.

"Make no mistake, these are tough decisions," said Gorman. "We have to make these decisions today [to improve the company's] long-term performance."

Most of the Morrisville workers whose jobs are being eliminated will be notified today and Friday, Gorman said.

The cutbacks are being made across the board. "No particular departments or functions are being targeted," he said. Late last year, Lenovo cut 50 workers locally.

Meanwhile, "the call center move will be completed by the end of the first quarter," said Gorman. The call center jobs will include sales and technical support positions; salary information wasn't available.

Shifting the call center jobs from Toronto will save the company because it owns its Morrisville campus, said Gorman. In Toronto, the call center operates out of leased space. It also makes sense, he added, to have the call center at the heart of its American operations in Morrisville.

Lenovo expects savings of about $300 million in the fiscal year ending March 2010, it said in a statement Wednesday. The company said it will book a charge of about $150 million this fiscal year.

In the quarter that ended Sept. 30, Lenovo's profits plunged 78 percent and fell well short of analysts' estimates. The company struggled with slower growth in its home market of China and declining sales in the U.S., where it lost market share to larger rivals such as Hewlett-Packard and Dell.

Lenovo entered the consumer market outside of China last year and this week is unveiling a line-up of new products, including an innovative dual-screen laptop, at the Consumer Electronic Association's giant trade show in Las Vegas.