Lenovo warns of ?material loss?

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