International Business Machines Corp, the world’s biggest computer-services provider, will cut about 5000 jobs today and tomorrow, according to a person familiar with the matter.
The reductions will primarily affect US jobs in the business services unit, according to two people with knowledge of the situation who declined to be identified. Worldwide, the division accounts for about a fifth of sales.
IBM had already cut at least 4000 positions since January, joining technology bellwethers Microsoft Corporation and Intel Corporation in trimming payrolls to cope with the recession. US employers have eliminated more than 823,000 jobs since November, driving up the jobless rate to 8.1% last month, the highest level in a quarter-century.
IBM had previously eliminated positions in other divisions, such as software and sales, according to severance agreements sent to affected employees. Those documents were provided by the Alliance for IBM, an employee group seeking union recognition. The company, which also cut more than 2000 positions in 2007, had almost 400,000 employees at the end of last year.
"I don’t believe this is the end," said Lee Conrad, coordinator for the group. "We’re losing jobs at a record rate inside IBM."
The stock dropped $1.37, or 1.4%, to $US96.93 at 3.10pm in New York Stock Exchange composite trading. It had risen 17% this year before today.
The business services division, which helps customers manage finances and business strategy, generated $US19.6 billion in 2008 revenue. Sales fell 4.5% last quarter as corporations pared budgets to deal with the economic slump. Technology spending may drop 9% this year, more than twice the rate previously forecast, Goldman Sachs Group said this month.
Sounds... familiar.
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