IBM cuts undisclosed number of global services jobs

Caroline Humer

NEW YORK: International Business Machines Corp., the world's largest computer

maker, Wednesday said it had trimmed the ranks in its computer services division

but declined to disclose numbers.

Employees, however, reported about 220 job cuts in three locations, said Lee

Conrad, a coordinator for Alliance@IBM, an affiliate of the Communications

Workers of America union, based in Endicott, New York, that is seeking to

organize IBM workers.

The cuts come one week after IBM confirmed it had cut jobs in its large

computer division and in operations. Job cuts at IBM have been expected since

April, when it reported a drop of more than 30 per cent in first-quarter

earnings amid weak technology demand from corporations.

A source familiar with the situation has said IBM plans to cut 7,950 to 9,540

jobs, or up to 3 per cent of its work force this quarter.

Conrad said Armonk, New York-based IBM cut 30 employees in Endicott, New

York, 50 in Rochester, New York and 140 in Research Triangle Park in North

Carolina. That would be a tiny percentage of IBM's 318,000 employees and its

more than 150,000 Global Services employees.

An IBM spokesman said that IBM's services division contracts and expands as

it completes projects or takes on new technology ones, often hiring the

customer's former employees. He said employees have 30 days to look for another

job at IBM.

"The nature of the services business is that we're constantly realigning

our resources for the customer engagements that we have at any given time,"

said IBM Global Services spokesman James Sciales.

IBM has declined to comment on the broad cuts, but its new chief executive,

Sam Palmisano, hinted of such reductions during a recent meeting with analysts,

saying the company needs to cut costs to align operations with weaker corporate

demand for new technology.

IBM shares closed down 0.6 per cent, or 48 cents, at $81.60 on the New York

Stock Exchange, while the broad American Stock Exchange Computer Hardware Index

fell 1.4 per cent.

(C) Reuters Limited.