Most job cuts are expected in IBM's European operations.
IBM said Wednesday it will slash up to 13,000 jobs worldwide as part of an expected restructuring aimed at boosting the company's slow-growing sales and profits.
In a statement, the company said the shakeup will include "voluntary and involuntary workforce reductions of between 10,000 and 13,000 employees worldwide." Most of the job cuts will come in Europe, the company added. IBM employs about 300,000 workers worldwide. The job cuts will result in a pretax charge of between $1.3 billion and $1.7 billion against second-quarter earnings, IBM said.
IBM CFO Mark Loughridge warned that a restructuring was in the offing when IBM released its first-quarter results April 18. IBM's revenue grew just 3.3% to $22.9 billion for the three months ended March 31. Net income rose a meager 2.9% to $1.4 billion.
IBM will doubtless face fierce labor opposition in Europe as it attempts to implement its plan. In April, workers in Germany staged protests and some French workers declared a short strike over the company's plans to close some facilities. IBM says the cuts reflect the fact that Europe is one of its slower-growing markets. IBM's first-quarter sales in Europe, the Middle East, and Africa increased 2%, excluding currency-related gains.
The Business of Going DigitalDigital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.
What The Business Really Thinks Of IT: 3 Hard TruthsThey say perception is reality. If so, many in-house IT departments have reason to worry. InformationWeek's IT Perception Survey seeks to quantify how IT thinks it's doing versus how the business views IT's performance in delivering services - and, more important, powering innovation. The news isn't great.