The outlook for emerging markets, especially China, is positive.
Shanghai. January 9. INTERFAX-CHINA - IBM is to restructure its global business, according to an internal company memo acquired by Interfax on Jan. 8, in a move that an IBM insider said would increase the company's efficiency in emerging markets, including China, without leading to any job cuts in its Chinese workforce.
The move follows an announcement by Chinese PC manufacturer Lenovo Group on Jan. 8 that it intends to restructure its business divisions in the China and Asia-Pacific regions in order to cut costs.
Lenovo, which bought IBM's global PC manufacturing and sales business for $1.25 billion in 2005, also denied that it will cut jobs in China, China Computer World reported on Jan. 8.
Under IBM's restructure, it will merge three of its regional operation teams and 15 of its regional marketing teams in emerging markets in South America, Central and Eastern Europe and Asia, including Greater China, to form a single growth markets unit.
Furthermore, IBM will recruit more staff in China to strengthen its business in the country, which was less affected by the global economic downturn than IBM's operations in the United States, according to the source. This month, IBM started to cut thousands of jobs in other markets.
"Although the new economic environment has affected markets around the world, the outlook for emerging markets, especially China, is positive," the IBM source said.
Meanwhile, Lenovo is to cut 2,500 jobs worldwide in the first quarter of this year and expects to save approximately $300 million in the fiscal year ending March 31, 2010.
To do so, Lenovo will also restructure its business divisions in the China and other Asia-Pacific regions into a single division covering Asia-Pacific and Russia. The new division will be run by Chen Shaopeng, Lenovo's global vice president and president of the Greater China business.
"Although the integration of IBM's PC business with Lenovo over the past three years has been a success, our performance for the last quarter did not meet our expectations, Yang Yuanqing, chairman of the board of Lenovo, said in a company announcement.
Interfax commentary: Global PC and high-tech product manufacturers, including IBM, Lenovo and Dell, will pay more attention to the Chinese market in 2009 due to the economic downturn, which has curbed consumer spending in the United States and Europe. This strategy hinges on the continued growth of Chinese consumer spending - something that the government is doing its utmost to encourage as China's traditionally export-driven economy turns towards domestic demand to shore up the market. However, the chugging dreadnought that is the Chinese economy cannot be turned on a dime, meaning tech manufacturers looking to the Chinese consumer for salvation will have to wait until at least 2010 to see if their faith will be repaid.
China's second largest online game exporter, Suzhou Snail Electronic Co. Ltd. (Snail Game), is expanding overseas into the world's most developed gaming markets with confidence in its ability to compete on both technology and innovation.
