Lenovo Q1 net profit down 51%, will cut 3,200 jobs in H2

Layoffs on the way for Lenovo

Lenovo's quarterly revenue rose 3 percent to $10.7 billion, below analyst expectations, as the world's No. 1 P.C. maker pointed to "severe challenges" in selling smartphones in China and PCs and tablets around the world.

The company said that about 3,200 people in non-manufacturing positions would also lose their jobs to save $650 million in the second half of 2015.

The revenue result compared with expectations of $11.29 billion, according to analysts polled by Thomson Reuters SmartEstimates.

The Beijing-based company's net profit plummeted 51 percent year-on-year to $105 million, but was ahead of a 59 percent drop expected by analysts.

Read MoreHere's why Lenovo is sticking with PCs

Chief executive Yuanqing Yang said Lenovo was facing the "toughest market environment in recent years" and would restructure its lagging smartphone business at a one-time cost of $600 million.

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