IBM global services cut 2,000 jobs, union says

By : |May 31, 2002 0

Caroline Humer

NEW YORK: International Business Machines Corp., the world’s largest computer
maker, cut about 2,000 jobs from its services division on Wednesday, a union
spokesman said on Thursday.

Employees reported receiving paperwork that put the total cuts in services at
2,000 — 10 times the 200 cuts that had been estimated by a representative of a
union seeking to organize IBM workers.

Armonk, New York-based IBM confirmed that it had made cuts in the division,
which in 2001 was IBM’s fastest growing division, but declined to comment on the
number. The company said employees have 30 days to find a new job within IBM.

IBM’s global services division employs more than 150,000 people — almost
half of IBM’s total 318,000 employees — putting the latest cuts at about 1.3
per cent of the services group and less than 1 per cent of the company overall.

The cuts come one week after IBM confirmed it had cut jobs in its large
computer division and in operations. The union said IBM cut 1,009 jobs in its
large computer division, 700 jobs in software and 95 positions in its global
financing division.

The job cuts took place in more than 10 locations including Boulder, Colorado
and Raleigh, North Carolina, said Lee Conrad, a coordinator for Alliance@IBM, an
affiliate of the Communications Workers of America union.

Other locations where the union said employees reported cuts were Charlotte,
North Carolina; Endicott, New York; East Fishkill, New York; Rochester,
Minnesota; Austin, Texas; Dallas, Texas and Burlington, Vermont.

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.

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’s services division drove the company’s growth in recent years but in the
past two quarters the division has seen its revenue decline due to those
spending cutbacks.

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