Yesterday, while the Westchester delegation was en-route to China, Lenovo Group Ltd.--which purchased the personal computer division of IBM last May in a $1.25-billion deal--reported it was relocating its worldwide headquarters from 38,798 sf of sublease space at One Manhatttanville Rd. to Morrisville, NC. The corporate headquarters move was announced as part of a cost-cutting program, which included the elimination of 1,000 jobs worldwide. The company states that moving its corporate headquarters offices will save the company time and money and will have its executives located closer to its manufacturing operations.
The company plans to take a charge of approximately $100 million in relation to the restructuring plan, most of which will be taken in the firm's fourth fiscal quarter, which ends March 31. The restructuring is expected to save Lenovo $250 million in the next year.
"The resource reductions that are part of this plan are, without question, the most difficult part of our program," says Lenovo president and CEO William J. Amelio. "We have thoroughly examined Lenovo's competitive position, and it's clear that for the future of the company, we have to take these actions."
The move by Lenovo apparently blindsided the Spano Administration, which on Tuesday, March 14 issued a press release detailing the itinerary of the China trade delegation. Referring to the planned meeting with Lenovo this Tuesday, the release stated, "The county officials are also meeting with Lenovo--the world's third largest personal computer company-- that recently decided to locate its world headquarters in Westchester. They hope to strengthen the relationship between the company and Westchester and to discuss future business possibilities."
In fact, up until recently Lenovo was still moving forward with a plan to move its permanent corporate headquarters into about 50,000 sf of space somewhere in Westchester County, most likely a build-to-suit facility. Spano, who was told of Lenvo's intent to relocate out of Westchester shortly after his arrival in China on Friday morning, still plans to meet with Lenovo executives in a scheduled two-hour meeting on Tuesday.
"Frankly we sort of knew that this could be in the works," says a Spano spokesperson. "Obviously, he is disappointed by this decision." The spokesperson adds that Spano plans to make the case to Lenovo officials in China to retain some presence in Westchester County.
A Lenovo spokesman, says that the firm will vacate its offices in Purchase in phases and prior to the sublease expiration on Oct. 31. The company has approximately 70 employees at the site.
In connection with its decision last May to house its corporate headquarters in Westchester, the company was eligible for sales tax incentives awarded by the Westchester County Industrial Development Agency for the fit-up of the space. Gorman says that Lenvo plans to return the small portion of the $36,000 in incentives it had received to date from the IDA.
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John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
