IBM starts cutting jobs, estimated at up to 8,000

2013-06-13T00:00:00Z IBM starts cutting jobs, estimated at up to 8,000Sarah Frier Bloomberg News Arizona Daily Star
June 13, 2013 12:00 am  • 

NEW YORK - IBM Corp. has begun cutting U.S. jobs as part of a plan announced in April to spend $1 billion globally to trim its workforce, according to an employee group.

Some U.S. employees began to receive notifications of the cuts Tuesday night, said Lee Conrad, a coordinator for Alliance@IBM employee group.

IBM, the world's largest provider of computer services, announced the job-cutting effort after releasing disappointing first-quarter results in April. The company posted profit of $3 a share in the period, missing the $3.05 predicted by analysts. It was the first earnings shortfall since 2005, according to data compiled by Bloomberg.

IBM said at the time that the job reduction would be concentrated overseas and mostly complete by the end of June.

The company is probably cutting 6,000 to 8,000 jobs globally, based on the $1 billion cost, said Laurence Balter, an analyst at Oracle Investment Research. That would represent less than 2 percent of IBM's total workforce of 434,246 as of Dec. 31.

"Change is constant in the technology industry, and transformation is an essential feature of our business model," IBM said Wednesday in a written statement, without giving specifics on the job cuts. "Consequently, some level of workforce remix is a constant requirement for our business. Given the competitive nature of our industry, we do not publicly discuss the details of staffing plans."

The $1 billion plan represents an increase over IBM's job-cut efforts in recent years. The company spent $803 million on workforce restructuring in 2012, up from $440 million in 2011.

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