'Tis the season for pink slips and cost-cutting, and PC behemoth Lenovo is putting coal in the stockings of its workers in Brazil.
As a part of its plans to reduce expenses, Lenovo will restructure its businesses in Brazil and cut 84% of its staff there.
The Chinese company initially planned to build a 52,000-square-meter manufacturing plant in Itu, a city in the state of Sao Paulo, Brazil. However, the company now decided to move it to Indaiatuba, the suburb of Sao Paulo, and the plant area will be reduced by half.
Brazilian local media revealed that Lenovo will reduce the number of its employees in Brazil from 5,000 to 800, which represents a layoff of 84%, so that its costs can adapt to the new market realities.
Lenovo's Indaiatuba plant makes two devices with an annual output of about one million units and about 90% of those products are sold in Brazil. Meanwhile, more expensive products like Yoga 910 laptops are imported from China and America.
At present, Lenovo ranks third in the Brazilian PC market with 13% market share, following Dell and HP. In 2012, Lenovo acquired Brazil's consumer electronics company CCE, aiming to improve its market share in this marketplace. Before acquiring CCE, the Chinese company also bought several local manufacturers, including Itautec and Positivo.
Statistics from the market research firm IDC showed that Brazil's PC market sales hit a new low in the third quarter of 2016, marking a year-on-year decrease of 35% and a decrease of 11% compared with the previous quarter.