Flextronics International has reportedly laid off some of its staff working in the desktop and all-in-one (AIO) PC units of its plant in Taiwan due to lower-than-expected performance in 2010. Flextronics has not yet responded to the market reports.

Flextronics shipped about 300,000 AIO PCs in 2010 which was lower than its projections, according to an estimate by Digitimes Research. Dell and Lenovo are Flextronics' two major clients for AIO PCs.

Some brand-name PC vendors are reducing the number of their ODM contractors for AIO PCs because global sales of AIO PCs have so far failed to grow as expected, according to industry sources. Previously, Lenovo had a total of five partners for AIO PCs and Dell had three makers.

The R&D department of Flextronics' AIO PC unit in Taiwan will be affected, but the notebook unit will not be included in the layoffs, the sources indicated. The notebook unit is currently shipping 250,000-300,000 notebooks a month, mostly to Hewlett-Packard (HP), said the sources.