May 1, 2007

Lenovo Hitting Triangle With Layoffs

Since my computer blow a power supply and it took half of everything else with it, I’ve had some time to think about what the layoffs happening at Lenovo might mean.

Back on April 19th
Rick Smith wrote a thoughtful article, on, about Lenovo’s second round of layoffs since they bought the IBM division for 1.25 Bil back in 2005. Like the cat that just cornered the canary, the big boys seemed confident that they now had what they needed to make a serious dent into the U.S. market. But that little canary was slipperier than the cat thought and the powers at Lenovo also forgot to bring that one last ingredient needed to finalize the deal; a quality product. There just isn’t much of a good story out there about their product and follow-up service.

At least company spokesman Ray Gorman sounded sincere and was forthcoming with some details needed to give an honest assessment. When the jerk, sorry, company spokesman for Hershey Foods, Kirk Saville, discussed their layoffs, he sounded like the people who have worked their entire lives for Hershey deserved the boot.

Ray Gorman quoted from the Smith article:

"I think most employees understand that (these) actions reflect the realities of our fiercely competitive industry,… These are difficult and certainly painful decisions, and we do not take them lightly."
This is a great example of how attitudes start at the top, Lenovos CEO Bill Amelio, called the layoffs "totally gut-wrenching."

I believe that Mr. Amelio had dreams of building something real in North Carolina but got caught by the storms named Dell, Hewlett-Packard and Acer.

As these companies venture into the States (or is that vulture) and build a client base, they also build back of the house services such as R & D, accounting, marketing, sales, distribution and customer service. Once these departments are up and running it becomes irresistible to move them to lower cost locations. But cost is only one factor, being an employer in the States comes with a load of regulation and litigation.