Lenovo sees 51% fall in profit, to slash 5% global jobs

A woman is seen at a store of Lenovo in Shanghai, Feb 26, 2013. [Photo/IC]

Personal computer and smartphone maker Lenovo group posted a 51 percent drop in net profit in first financial quarter ending June 30.

Revenue increased by 3 percent to $10.7 billion, profit before tax went down 80 percent to $52 million and net profit fell to $102 million from $211 million from 2014. To reduce cost and improve profitability, the company announced that it will cut 5 percent of its non-manufacturing jobs or 3,200 jobs globally.

Lenovo's PC shipments declined by 7 percent to 13.5 million while Lenovo's share of the global PC market increased by 1.3 percentage points to 20.6 percent, according to the company. Personal computers are still core business to Lenovo, accounting for $7.3 billion of its $10.7 billion of business.

As for mobile products, including smartphones, Lenovo lost 0.5 percent to 4.7 percent total market shares in global smartphone market in first quarter. With the Motorola brand, recently acquired from Google, taking the lead in product development, design and manufacturing, Lenovo is facing major restructuring of its smartphone business.