IBM cutting another 1500 positions

IBM Corp. laid off 1,570 people Wednesday [30 May 2007], primarily from an ongoing overhaul of operations in its giant technology services unit. IBM carried out a similar level of job cuts at the beginning of the month, for a total of 3,023 in this quarter and 3,720 for the year, according to IBM spokesman Edward Barbini. That amounts to roughly 1% of the company, which employed 355,000 people at the beginning of the year.

Services is IBM's biggest division by revenue, but the advent of lower-cost competition overseas has forced IBM to work harder to improve the unit's profit margins. IBM executives say they expect no more layoffs this quarter. But other shifts like this - IBM calls it "rebalancing" - figure to follow from time to time. That's because IBM's services overhaul not only involves cheaper labor - IBM's work force in India rose from 9,000 in 2003 to 52,000 last year - but also a quest to use less labor. That means rethinking and sometimes automating the ways that services contracts are carried out.

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