The world's fourth-largest personal computer maker, Beijing-based Lenovo, announced a restructuring plan for its Asian operations with about 11 per cent job cuts on fears of a prolonged global economic downturn, that would enable it to save $300 million.

The restructuring plan aims at increasing the company's efficiency and become more competitive in the face of a long and painful economic recession, a statement from the Chinese hardware maker said.

A part of the "resource redeployment plan,'' includes the layoff of 2,500 employees or 11 per cent of its total workforce, including management and executive positions, in the first quarter of 2009. Lenovo expects this to reduce expenses in support and staff functions, such as finance, human resources, and marketing.

Executive compensation will be reduced by between 30 per cent and 50 per cent, including bonuses and other incentive payments, in the coming year.

The statement did not mention whether the layoffs would be spread evenly across all of the regions where the company operates or confined to specific areas.

''These actions in total will help take advantage of Lenovo's strengths as a global organization to better align its resources with shifting customer demands in the current marketplace,'' the statement said.

''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,'' said Yang Yuanqing, Lenovo's chairman of the board.

He said these measures ''in an uncertain economy'' would help ensure the company ''to operate its business efficiently and effectively and continues to grow in the future.''

With the slowdown in the American market, its core market, and a 78-per cent decline in net profit for its fiscal second quarter in November from to $23.4 million last year, an expected loss in the third fiscal quarter 31 December 2008, Lenovo has been forced to undertake the restructuring.

Moreover, the company faces severe threat from Hewlett-Packard Co. and Dell Inc in China, which contributes about 40 per cent to its total revenue.

In addition, the "resource redeployment plan" included consolidation of its China and Asia Pacific organisations, which currently run as separate businesses into a single business unit called Asia Pacific and Russia (APR) to enable the company to reduce its operating expense and eliminate duplicative support and staff functions.

Asia Pacific and Russia (APR) unit will be headed by Chen Shaopeng, currently senior vice president and president, Greater China, while David Miller, senior vice president and president, Asia Pacific, will remain in the transition period.

As part of its restructuring, the company said it was relocating its call centre operations from Toronto to Morrisville, North Carolina, the company's North America headquarters in order to ''better leverage its investment in real estate and facilities, and better serve its customers by bringing the call center team closer to its marketing and sales functions.''

As part of the company's streamlining efforts Rory Read, senior vice president, operations will take over from Scott DiValerio, senior vice president and president, Americas, who has led the Americas Group sales organisation for the past year.

The company expects to save about $300 million in the fiscal year ending 31 March 2010 as a consequence of its restructuring plan. However, it anticipates taking a pre-tax restructuring charge of about $150 million, bulk of which will be taken in the fourth quarter ending 31 March 2009.

The company's restructuring charges of about $24 million were posted in second fiscal quarter ending September 30, 2008.

''The actions we are taking today are not easy, and we will act with compassion and respect for the individuals in our company who are most affected,'' said William J. Amelio, Lenovo's president and chief executive officer.

The trading on Lenovo stock was suspended on the Hong Kong stock market yesterday, amid speculation of an impending restructuring and resumed this morning with the stock declining 17 per cent in early trades.

The company had announced super slim all in one desktop and a 16-inch laptop last week, along with four new IdeaPad laptops including, the IdeaPad Y650, one of the thinnest and lightest 16-inch laptops, the Y550 and Y450 laptops with a similar family design to the Y650, and one of the thinnest all-in-one desktop PCs, the IdeaCentre A600[2].

Lenovo was formed by Lenovo Group's acquisition of the former IBM's personal computing division and has major research centers in Yamato, Japan; Beijing, Shanghai and Shenzhen, China; and Raleigh, North Carolina.