By staff reporter Chen Qian

From Caijing Online

Lenovo Group announced it would layoff 11 percent of its global work force, while forecasting a loss for the third fiscal quarter.

The computer maker said in a January 8 statement that it would cut 2,500 jobs outside of China over the next three months, including management and senior executives. The layoffs will not involve the China region.

Meanwhile, executive compensation, including bonuses, will shrink by 30 to 50 percent in 2009.

These measures should save about US$300 million during the fiscal year ending March 31, 2010.

The news sent Lenovo’s share price down by 20 percent in Hong Kong by the noon on January 8.

Meanwhile, Lenovo will consolidate its Greater China-Russia and Asia Pacific operations into one, headed by Chen Shaopeng, who currently heads the Greater China operation.

Scott DiValerio, senior vice president of the Americas operation, will be replaced by Rory Read, operations chief.

Along with the restructuring, Lenovo also forecasted a quarterly loss due to the recession.

Yang Yuanqing, chairman of the board, said in the statement, "Although we successfully integrated IBM’s PC business over the past three years, performance last quarter did not meet expectations. We are taking these steps now to ensure our business operates efficiently and effectively in the uncertain economy, and maintains growth in the future."

Lenovo posted lower-than-expected profits last year. From July to September, the company reported US$ 23.44 million in net profits, down 78 percent year on year.

In December 2008, JP Morgan lowered Lenovo's rating, predicting that expansion in the consumer market would squeeze profits and bring short term losses.