posted on May 4, 2005 07:25:56 PM new
IBM to cut 10,000 to 13,000 jobs, mostly overseas
NEW YORK (AP) — In a widely expected move, IBM (IBM) said it is restructuring its operations to make them leaner and nimbler, slashing 10,000 to 13,000 jobs, mostly in Europe, and taking a second quarter charge in the process.
The company said Wednesday that the pretax charge will amount to between $1.3 billion and $1.7 billion.
The majority of the layoffs are planned for Europe, where the company began cutting jobs even before it announced its disappointing first-quarter earnings last month. In March, IBM laid off 500 Swedish workers, 9% of its workforce there, and shut down most operations in five cities.
The cuts, which will affect from 3% to 4% of IBM's 329,000-person workforce, are in line with analysts' predictions.
IBM surprised investors in April when it missed first-quarter earnings estimates by 5 cents a share. Chief financial officer Mark Loughridge said during the earnings conference call that the company planned a "sizable restructuring."
"European sales seemed particularly disrupted as rumors flared in the final weeks of the quarter," Goldman Sachs Group analyst Laura Conigliaro wrote in a report last month.
IBM said it will run fewer services offices worldwide and it will reduce European managers.
"As a result, IBM will create a number of smaller, more flexible local operating units in Europe to increase direct client contact," a company press release stated. The company said it will discuss more details of the restructuring in a webcast Thursday morning.
IBM said it will realign operations in Europe to reduce bureaucracy in lower-growth countries. Sales in France, Germany, Italy and Japan, which account for one-quarter of the company's revenue, were down 5% in the first quarter.
IBM stock closed at $77.08 a share on the New York Stock Exchange, up 61 cents, on Wednesday. In after-hours trading, the stock was up 67 cents, to $77.75 a share.
posted on May 6, 2005 03:18:22 PM new
Bear - What does laying off european workers in lagging euopean markets have to do with outsourcing?
For some reason you have a habit of confusing outsourcing with having employees in your foreign markets.
If one were to use your logic then Japan is perhaps the world largest out sourcer of labor once you consider the number of American employees they have in the numerous corporations that that they own here.
Libra - what is it that you wanted people to say?
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If it's really "common" sense, why do so few people actually have it?
posted on May 6, 2005 04:06:47 PM new
Confused? Hardly.
DemocRATs complain when a company "outsources" American jobs, now when IBM cuts back on the "outsourcing" you complain about the poor workers in a "depressed" country.
Give me a break.
A word to the wise ain't necessary, it's the stupid ones that need the advice."
- Bill Cosby
posted on May 6, 2005 04:21:57 PM new
Bear - you might want to update yourself on the definition of outsourcing because you don't seem to be grasping the concept.
There is a huge difference between setting up an off site location exclusively for the purpose of employing cheap native labor and having a foreign office where you employ local talent.
IBM is a global corporation, do you really expect them to not have offices in other countries?
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If it's really "common" sense, why do so few people actually have it?
posted on May 6, 2005 06:15:44 PM new
OUTSOURCING: The transfer of components or large segments of an organization's internal IT infrastructure, staff, processes or applications. . .
or
1. Performance of a production activity that was previously done inside a firm or plant outside that firm or plant. 2. Manufacture of inputs to a production process, or a part of a process, in another location, especially in another country. 3. Another term for fragmentation.
IBM is not outsourcing. They didn't take American jobs and move them overseas. They opened an overseas location and hired local people. Big difference.
Cheryl
[ edited by CBlev65252 on May 6, 2005 06:17 PM ]
