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IBM allocating $1 billion for major round of job cuts

By David Ranii
(Raleigh) News & Observer

IBM workers in Research Triangle Park and elsewhere are bracing for another round of major job cuts.

The technology giant’s chief financial officer, Martin Schroeter, told analysts during a conference call Tuesday that the company expects to take an approximately $1 billion “workforce rebalancing charge” in the first quarter.

That’s how much the company allocated for last year’s job-cutting effort, which led to an estimated more than 3,000 workers across North America losing their jobs, according to Alliance@IBM, a union that has been trying to organize the company’s workers for years. That number couldn’t be confirmed as IBM has long declined to provide details about job cuts.

The planned layoffs come in the wake of seven consecutive quarters of declining revenue at IBM. The company’s fourth-quarter revenue of $27.7 billion, announced Tuesday, also fell below what analysts were expecting.

The company also is looking to sell off lower-margin businesses and top executives are forgoing annual bonuses.

Lee Conrad, national coordinator for Alliance@IBM, estimates that the company’s Triangle workforce has dwindled from 11,000 in 2006 to between 7,200 and 7,600 today. That estimate doesn’t include contractors, a sizable contingent of the workforce for many employers, or foreign IBM workers who are here working on projects.

Alliance also estimates that IBM’s U.S. workforce has fallen from 127,000 in 2006 to 88,150 last year. Alliance bases its estimates on notices received by dismissed IBM workers that disclose the impact of job cuts in their particular units.

Alliance is reporting on its website that it has learned that names of employees earmarked to be laid off in the Systems and Technology Group, which has a significant presence in RTP, are supposed to be submitted to IBM executive management at the end of this week.

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