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IBM confirms 15K job losses

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IBM is cutting more than 15,600 jobs worldwide in its computer services and microelectronics divisions, due to lower demand for its products and services.

According to documents that IBM filed with the US Securities and Exchange Commission (SEC), 1,400 of the job losses will take place in the microelectronics division, but the majority of the job losses are taking place in the computer services division, where 14,213 people are losing their jobs.

According to IBM, more than half of the cut workers left the company by the end of June and all of the layoffs will take place by the end of September. The global services division of the company had about 150,000 employees before the job losses and IBM had around 320,000 employees in total at the end of 2001.

IBM had announced job losses when it announced its second quarter results in mid-July, but the numbers and details of the redundancies were not known until now.

IBM employs 4,000 people in Ireland in call centres, manufacturing and sales operations, mostly in Dublin. So far this year, IBM has announced no job losses in the Republic. And although almost 60 percent of the cuts have already been made, it is unclear whether the remainder of the cuts will hit Irish workers. IBM says all of the workers who will lose their job will be released by 30 September.

At the end of July, IBM announced plans to purchase PricewaterhouseCoopers' Consulting Division, in a deal worth around $3.5 billion. Whether that deal will result in job losses for its Irish workers remains to be seen as well, although early analysis of the merger indicated that any possible cuts here would be modest.

PwC Consulting employs 30,000 people worldwide and an estimated 250 of its workers in Ireland will be affected by IBM's purchase. The deal still must be approved by PwC's 9,000 partners worldwide, as well as by the US Securities and Exchange Commission.

IBM has been hit hard by the technology slowdown and squeezed out a profit of just USD0.03 per share for its second quarter, taking a USD2.1 billion charge.

The company's net income amounted to only USD56 million in that quarter, compared with USD2 billion, or USD1.15 a share, in the second quarter of 2001. The charges which were to blame for the 97 percent decline in profits were the USD825 million it cost for the reorganisation of its microelectronics business, USD802 million job cuts in other parts of the company, and USD428 million the business write-off for the discontinuation and sale of its hard disk-drive business to Hitachi.

© ENN.

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