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Profit warning sees shares plunge by over 20 per cent, 2500 jobs to be lost

Lenovo warns of ?material loss?

Chinese PC vendor Lenovo has seen its share price drop by over 20 per cent after issuing a profit warning for the fourth quarter of 2008, claiming it would suffer ‘material loss.’

As a result of this, the firm will be cutting 2,500 jobs ¬– 11 per cent of its workforce – including management and executive positions, and reduce executive compensation by 30 to 50 per cent.

Additionally, it is planning a $150 million restructuring program, which includes merging its China and Asia-Pacific businesses in to a single unit and relocating its call centre operations from Toronto to North Carolina.

“Although the integration of the IBM PC business for the past three years was a success, our last quarter’s performance did not meet our expectations,” commented Lenovo chairman Yang Yuanqing.

Source: FT

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