5 Companies That Had A Rough Week

The Week Ending Aug. 19

Topping this week's roundup of companies that had a rough week was Lenovo, which continued to see a sales decline.

Also making the list were Cisco, which is undergoing a restructuring that includes thousands of layoffs; Microsoft, which was criticized by the Electronic Frontier Foundation for its aggressive Windows 10 upgrade efforts; retailer Eddie Bauer for a cyberattack on its point-of-sale systems; and Google for its shrinking Google+ social network.

Not everyone in the IT industry was having a rough go of it this week. For a rundown of companies that made smart decisions, executed savvy strategic moves or just had good luck, check out this week's Five Companies That Came To Win roundup.

Lenovo Sees Q1 Sales Decline, Deepening Losses In Data Center And Mobile

Lenovo will refocus its PC business, concentrate on higher-priced smartphones and take other steps as it struggles with declining sales and fierce competition.

This week, the China-based PC giant said revenue in its fiscal first quarter was down 6 percent year over year, including a 6.8-percent drop in the Americas and a 9.8-percent plunge in sales in China. Lenovo's PC sales were down 7 percent from a year earlier, its data center business was off 1 percent (with a $64 million operating loss) and its mobile business declined 6 percent (leading to an operating loss of $206 million).

The company did report an operating profit of $370 million, up 2.4 percent. But efficiencies can only take a company so far and at some point the company will have to find a way to grow.

Cisco Launches Restructuring; 5,500 Employees Facing Layoffs

Cisco Systems this week said it's undertaking a major restructuring effort as it seeks to pivot toward new technology areas such as security and the Internet of Things. And for some 5,500 Cisco workers – about 7 percent of the giant vendor's workforce – that could mean pink slips.

Certainly IT vendors must often make drastic changes to their corporate structures, skill sets and cultures to stay competitive in this fast-changing industry. Those that don't fall by the wayside and eventually disappear.

But that doesn't make the process any less painful for the companies themselves or, in Cisco's case, some 5,500 employees.

Electronic Frontier Foundation Hits Microsoft For Windows 10 Upgrade Efforts

The industry watchdog Electronic Frontier Foundation published a scathing blog post this week that said Microsoft "blatantly disregards user choice and privacy" with Windows 10 and called on the vendor to provide a single, unified portal with the software that helps users control how Windows 10 handles their personal information.

The post took Microsoft to task for the way the vendor "aggressively pushed Windows 10 on its users" and used tactics that ranged from "annoying to downright malicious" and "trampled on essential aspects of modern computing: user choice and privacy."

Earlier this year, news stories were filled with complaints from users who felt tricked into upgrading to Windows 10. The blog post noted that Microsoft even made Windows 10 a "recommended upgrade" that downloaded the software when PC users tried to install security updates.

Retailer Eddie Bauer's POS Systems Hit With Malware

Outdoor clothing retailer Eddie Bauer said this week that it detected and removed malicious software from point-of-sale systems at all of its 350-plus stores in the U.S. and Canada, according to a report on the Krebs on Security website.

The company said the cyberattack appeared to stretch back to at least January, according to the Krebs site, and the retailer acknowledged that credit and debit cards used at those stores during the first six months of this year may have been compromised in the breach.

The company said the security breach did not impact purchases made at the company's online store.

The Shrinking Google Social Network: Google+ Hangouts On Air To Be Discontinued

Google's flailing efforts to field a competitive social network took another hit this week when the company said its Google+ Hangouts on Air live web broadcasts would no longer be available starting Sept. 12, according to a notice posted on the company's YouTube support pages.

Google said Hangouts on Air would continue on YouTube Live, where they have also been available for several years.

A PCworld story noted that Google has been slowly moving features away from Google+, either removing them entirely or replacing them.