Lenovo’s Latest Layoffs Cut Deeply into Remaining Ranks of IBMers

MORRISVILLE, N.C. - My new Lenovo laptop is still emblazoned with I in red, B in green and M in blue and “ThinkPad” stamped in brilliant white. But the IBM presence within Lenovo continues to dwindle.

On Thursday, Lenovo said it would slash more than 20 percent of its workforce in Morrisville – approximately 350 out of 1,600 jobs.

Most of them are former Big Blue employees, who became part of Lenovo when the China-born PC manufacturer bought IBM’s personal computing division in 2005 for $1.25 billion.

The latest workforce reduction, which is 1,400 company-wide out of a workforce of more than 24,000, is the second in just over a year. That first round took out around 300 former IBMers among 1,000 layoffs.

So, the bottom line is, out of 2,000 IBM workers who moved to Lenovo, some 600 are history – or will soon be.

Several top executives who once held senior positions at IBM have also moved on, ranging from Lenovo’s first CEO after the IBM deal was finalized to its president for the Americas. They have been replaced in large part by former executives at Dell where Lenovo’s William Amelio once worked. (By the way, Amelio worked for IBM, too, before becoming Dell’s top exec in Asia.)

Changes were hardly unexpected when Lenovo bought the IBM business since Big Blue had given up on consumer sales and its overall PC and laptop business was in trouble. However, Lenovo decided to move its corporate headquarters to Morrisville and build new offices while consolidating some U.S. operations to the Triangle.

In fact, local reporters were invited to tour the newly opened complex last month. But rumors about another round of layoffs were already circulating.

On Thursday morning, a viewer sent a tip to WRAL.com that the layoffs had started. Many jobs were being shipped overseas with hundreds of former IBM employees finding their names on the dismissed list.

Minutes later, Ray Gorman, Lenovo’s top spokesperson, called to confirm most of the viewer’s tip. In a later phone interview, he described the situation within the company as “sensitive.”

Despite the reductions locally, Gorman stressed that Lenovo is “absolutely committed” to the Triangle. “We have been reaching out to state and local governments to inform them of our plans,” he added.

Lenovo was promised economic incentives from state and local governments to build its $70 million campus in Morrisville, but those were based on creation of new jobs.

“We have not received any money from any state or local agency,” Gorman said. “The incentives were offered in the form of future tax credits that we would qualify for by adding jobs. They were bench marks.”

The job cuts are intended to help Lenovo grow, he added.

“Quite frankly, the actions we are taking to date are positioning the company to grow faster and to be more profitable,” Gorman said. “We’ve made a lot of progress in our business, but our competitors are more cost efficient than Lenovo. We need to make these changes to accelerate our progress.”