Big changes ahead: Restructures are now the norm in the tech industry

With the likes of Lenovo cutting jobs, Google working under a new brand and Ebuyer reshuffling, what do these major changes mean for the industry, asks Jade Burke

Major tech firms have all started to restructure their workforce, but why are so many slashing jobs? One of the most recent cases has seen Lenovo cut 10 per cent of its workforce in a bid to reduce expenses in a competitive market. 

In an email, Lenovo boss Yuanqing Yang said to his employees: “Changes in the market and in our competition are coming very quickly, and we must accelerate our transformation across the company.”

Around 3,200 members of Lenovo staff are expected to lose their positions, but they aren’t the only ones facing this problem. Last year, tech giant Microsoft confirmed it would lay off 18,000 employees globally as part of a restructure plan following its acquisition of Nokia, with more cuts announced earlier this year.

Lenovo layoffs prove the PC market is in freefall; expect "radical" changes ahead

But why are these tech companies choosing to cut their workforce? No doubt the completive nature of the tech market is an increasingly worrying factor for firms, which could indicate why businesses are choosing to
do so. 

Jeremy Davies, CEO and co-founder of Context, tells PCR: “Times are changing for PC market players as business and consumer needs shift.

“Until the next tech wave hits, and there are doubts over what this could be, major manufacturers such as Lenovo have to adjust to cope with either flattening or declining sales across most of the major product segments. It’s a tough market and getting tougher, so adjusting expenses such as headcount is a logical move.”

But it’s not just vendors who are choosing to reshuffle; etailer has also rearranged its buying team and let its MD Stuart Carlisle go.

Other vendors have also gone on to rearrange their businesses, for example PC vendor HP announced it would split itself into two businesses known as HP Enterprise and HP Inc, which are to be put into action on November 1st, 2015. HP has since revealed that each business – one focusing on enterprise and cloud computing, and the other on printing – will now have its own board of directors.

Patricia Russo, lead independent director at HP, said in a statement: “We set out to create two boards with the most experienced and diverse members we could find to help each company win in their unique markets.”

Meanwhile, distributor Ingram Micro has also announced new chief executive roles in each of its country-level European businesses. This restructure aims to give more power to its local units, which sees former UK MD Brent McCarty stepping up to become the in-country chief executive.

McCarty said: “Our traditional distribution business is our core foundation but we are looking to offer our customers a full suite of services that helps them compete more aggressively, reduce costs and deliver a better experience to their end users.”

Bigger companies are also coming under scrutiny a lot more: This is the most damaging report on Amazon since the warehouse worker scandal of 2013.

Google has also announced the news it is restructuring into a selection of companies that will be known collectively as Alphabet. As part of the restructure, Google’s co-founder Larry Page is stepping up as CEO of Alphabet, which will see the company branch out into many new areas in tech. For example, Page revealed that Google won’t just be working on its Chromebook segment and will be embracing new ares of tech including drones, as part of the company’s new restructure. 

The sky really is the limit now for Google, and other firms should start to look to the tech giant and set their sights higher. More companies need to be doing more then dabbling in the traditional PC, and embracing newer tech such as cloud services and virtual reality if they stand a chance in this competitive market. 

Image source: Shutterstock

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