International Business Machines Corp. (NYSE: IBM) began laying off employees in the U.S. as part of a worldwide restructuring plan estimated to cost about $1 billion, Bloomberg reported on Wednesday.
In April, the Armonk, N.Y.-based computer-services provider announced plans to reduce its workforce after its first-quarter results fell short of expectations. An anonymous Bloomberg source said the cuts will affect “rank-and-file staff to executives.”
IBM will probably cut 6,000 to 8,000 jobs worldwide, based on an estimated restructuring cost of $1 billion, including severance expenses, Laurence Balter, an analyst with Oracle Investment Research in Fox Island, Wash., told Bloomberg. If so, the layoffs would affect fewer than 2 percent of IBM’s total workforce of 434,246 as of Dec. 31.
Lee Conrad, national coordinator for Alliance@IBM, an employee group, told Computerworld that about 1,200 employees in IBM's Systems & Technology group have already been laid off, in addition to 200 employees in the research division. Last week, Alliance@IBM said that about 2,800 employees in software and sales and distribution were let go.
Conrad was critical of IBM’s policy, which is to withhold numbers for employment and for job cuts. "IBM should be as forthcoming as all the other companies," he said. "We just simply don't understand why they are keeping it a secret and neither do the employees."
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In a statement, IBM spokesman Doug Shelton said, "Change is constant in the technology industry and transformation is an essential feature of our business model. 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.
“IBM is investing in growth areas for the future: Big Data, cloud computing, social business and the growing mobile computing opportunity. The company has always invested in transformational areas, and as a result we need to remix our skills so IBM can lead in these higher-value segments in both emerging markets and in more mature economies.”