IBM Plans Restructuring

IBM will freeze pay raises for executives this year on the heels of weak first-quarter results, the company said last week at its annual stockholders meeting. The move is an acknowledgment that some of IBM's troubles are of its own making, CEO Sam Palmisano said. "It was us, it was our inability to close deals," Palmisano told shareholders. Earlier this month, IBM said first-quarter revenue grew just 1%, excluding currency-related gains.

IBM officials said the company will undergo a sizeable restructuring to boost financial performance but they've yet to provide details. UBS analyst Benjamin Reitzes believes the company will ax about 10,000 positions from a global workforce of 330,000. However, Reitzes says he doesn't expect IBM to sell any business units.

Layoffs could strain employee morale. Last week, about 600 workers gathered at IBM's German headquarters in Stuttgart to protest possible plans to close some facilities in Europe, and workers in at least two locations in France staged a short strike. At its annual meeting, stockholders voted down by a wide margin an employee-led initiative to study the effects of offshoring on the company's business and reputation.