The world largest PC is also struggling with mobile phone sales

folarin okunola

August 13, 2015 4:55 PM

The company's mobile arm announced a pre-tax loss of $292 million for the three months ending in June: Motorola phones shipped stood at 5.9 million, down just less than a third from last year.

Lenovo Vibe Z smartphone

Lenovo is the biggest PC maker in the world, but selling smartphones remain a challenge for even the biggest of them all.

Reports have revealed that the company's mobile arm announced a pre-tax loss of $292 million for the three months ending in June: Motorola phones shipped stood at 5.9 million, down just less than a third from last year.

Engadget reports that the company now plans to cut 10 percent of its non-manufacturing jobs (roughly 3,200 people), aiming to save around $650 million in the second half of 2015. It's also writing down $300 million in unsold phones.

The company's total net profit went down 51 percent year-on-year to $105 million. Yang Yuanqing, Lenovo's chief exec, told Reuters that he still supports the acquisition of Motorola, which cost Lenovo $2.91 billion in 2014.

He also stated that restructuring Motorola and Lenovo's smartphone divisions will take two to three quarters.

The Engadget report says this looks likely to cost $600 million, due to the "toughest market environment in recent years" -- likely why the company is trying all sorts of solutions to end its poor run in the mobile phone business.

folarin okunola