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5/30/2007
04:28 PM
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IBM Cuts 1,500 More U.S. Jobs As Monthly Total Nears 3,000

IBM attempts to shore up profits in its outsourcing business, which saw a 19% drop-off in pre-tax income in the first quarter.

After paring 1,300 domestic positions at the beginning of the month, IBM on Wednesday handed out another 1,500 pink slips, according to a group that represents IBM workers.

The numbers were confirmed by an IBM spokesman.

The layoffs are said to be concentrated in the U.S operations of IBM's Global Services unit, which accounts for about half of the company's sales.

IBM is attempting to shore up profits in its outsourcing business, which saw a 19% drop-off in pre-tax income in the first quarter.

To that end, IBM is in the midst of restructuring the way it delivers services to Global Services customers. Under the initiative, dubbed Lean, IBM is disbanding some specialized groups of service representatives in favor of more centralized pools of reps that can handle a broad range of customer-support requirements from a single location.

According to IBM and the worker group Alliance@IBM, the company axed 1,570 jobs Wednesday, bringing the total job cuts for May to nearly 3,000. The number represents more than 2% of IBM's total U.S. workforce.

It wasn't immediately known which IBM locations were affected.

Earlier this month, Alliance@IBM asked workers at the company to stage a 15-minute job action to protest the layoffs. It's not clear how many actually participated.

An IBM spokesman said the cuts are part of ongoing workforce rebalancing efforts and that they're offset by hiring at other U.S. locations.

Editor's note: This story was updated at 5 p.m. to include a response from an IBM spokesman.

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