Computerworld reports that Lenovo, the Chinese computer company that bought IBM's PC division, is laying off 1,000 employees and relocating its headquarters from Purchase, N.Y., to Raleigh, N.C.
The layoffs represent about 5% of the company's 21,400 employees. Lenovo managers will identify the workers by the end of March, spreading the cuts throughout company offices in the Americas, Asia-Pacific and EMEA (Europe, the Middle East and Africa) regions.
The changes make sense in terms of the competitive PC market, analysts said.
"Business desktops are a narrow, narrow margin business; they are almost a commodity. You have to be very efficient in order to make money selling desktops," said Gordon Haff, senior analyst at research company Illuminata Inc.
Lenovo faced a challenge achieving that efficiency because it was still struggling to integrate IBM's PC division into the rest of the company. Lenovo acquired that business in 2005.
Aside from Raleigh, NC the news is not good for the PC industry. PC prices have been dropping now for several years which is great for consumers but tough on PC manufacturers.
