Lenovo has reported a decline in sales by almost half of revenues which led the smartphone company and Chinese computer firm to let go of 3,200 employees.
The net profit for the first quarter has taken a plunge of 51 percent to $105 million. Earnings went up by 3 percent to $10.7 billion, but this figures were way below forecasted revenues.
Lenovo disclosed that it had been experiencing "the toughest market environment for years," reporting a breakneck decline in mobile division sales.
The employees that will be cut represents about 5 percent of Lenovo's global workforce and 10 percent of its non-manufacturing workers.
The world's largest PC-maker said that the job cuts were part of a cost-cutting scheme aimed at preserving $650 million in the remainder of 2015, BBC reported.
Lenovo has also reported marked declines in its tablet sector and global computer, as well as expanding competition and steep growth in the smartphone retail.
In effect the company would also revamp its smartphone business as said by Chief Executive Yuanqing Yang.
The company bought the Motorola brand last year from Google to boost its standing in the market for $2.9 billion.
According to NDTV Gadgets, the company's reason for the Motorola purchase was for "intensifying competition and long product development lifecycles" in the field of technology.
However, the shipment of Motorola stood at 5.9 million units, a decline of 31 percent from the previous year.
The firm's mobile division on the other hand recorded a $292 million pre-tax loss in the three months until the end of June.
Meanwhile, the chief executive and Lenovo Group Ltd chairman, acknowledged the procurement of handset brand Motorola, stating that it will help Lenovo to become an international smartphone player despite a sharp fall in freight volumes.
"I still believe this acquisition was the right decision," Yuanqing Yang told Reuters.
Yang said this was an effort to rearrange to streamline Lenovo's legacy smartphone section and global transaction over the Chinese market, which has demonstrated as "definitely challenging," as per The Times of India.
