Thursday May 05, 2005

IBM to axe 13000 staff

iht.com :

IBM has announced that it will lay off 10,000 to 13,000 workers, mostly in Europe, as it struggles to keep up its profit at a time when global competition in the technology business spreads beyond selling computers to providing services.

IBM employs about 322,000 people worldwide today, after 10,000 IBM workers were transferred to Lenovo Group of China, which on Sunday completed its purchase of IBM's personal computer business. So the payroll cuts will amount to 3 percent to 4 percent of the work force. While most of the trimming will be in Western Europe, including Germany, France and Italy, some will also be made in the United States, where IBM employs 120,000 people ...

The company attributed its weak performance primarily to its big services business, which now accounts for more than half of the company's revenue and is supposed to be the main engine of IBM's growth in the future.

In a sense, IBM's strategy in moving toward services mirrors the course of the U.S. economy. The company depends less on manufacturing than it did in the heyday of mainframe computers as it moves up the economic ladder to helping corporate customers use information technology ... yet IBM faces increasing competition and price pressure in services from low-cost rivals like Dell, which is rapidly expanding in services, as well as Indian outsourcing companies like Wipro, Tata Consulting and Infosys ...

See also :

1. IBM sees $300-$500 mln 2005 savings from job cuts (reuters.com)
2. IBM to cut up to 13,000 jobs in Europe (businessweek.com)

(2005-05-05 22:23:50 SGT) [Biz] Permalink

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