Feeds

IBM to fix bad quarter by axing 13,000 jobs

Heads roll to shareholders

  • alert
  • submit to reddit

Secure remote control for conventional and virtual desktops

IBM will carve up to 13,000 workers from its payrolls with European staffers taking the majority of the hit, the company announced today.

The actual layoff range provided by IBM stretches between 10,000 and 13,000 workers, who will be axed via both voluntary and involuntary means. These actions will lead to IBM taking between a $1.3bn and $1.7bn charge in its second quarter.

Are the layoffs a shock? Hardly.

Analysts speculated about a five-digit firing ever since IBM posted lackluster first quarter results. IBM blamed weak mainframe and storage sales and slow sales in Europe for a significant earnings miss. Now, it seems, European workers will have to pay the price.

"The actions will accelerate progress toward more globally integrated operations, while addressing profitability in slower-growth regions, primarily in Europe," IBM said in a filing with the US Securities and Exchange Commission. Later in the filing it added, "The majority of the overall workforce reductions are planned for Europe, and the company has initiated discussions of these changes with local consultation bodies."

One could easily argue that IBM is being a bit rash with these moves. On the surface, it appears that Big Blue is firing a huge quantity of staffers just to please shareholders. Its mainframe and storage businesses have performed well over the last couple of years - so does one miss justify such a broad stroke?

Last August, IBM bragged that it would hire 19,000 new staffers by the end of 2004. More than half that total is now being sent packing just four months into the new year.

What dramatic change has taken place in IBM's business to warrant such a mood swing?

IBM's rivals have not seen the same slowdown in overall IT spending or European weakness mentioned again and again by Big Blue. So, again, what gives? ®

Related stories

Sun erases fourth quarter profit with $1 billion charge
Dell ready to go on India hiring binge
IBM may fix slump by firing 10,000 - analyst
IBM faces protests
IBM finds misconduct, earnings abroad

Secure remote control for conventional and virtual desktops

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Kaspersky backpedals on 'done nothing wrong, nothing to fear' blather
Founder (and internet passport fan) now says privacy is precious
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Facebook, Google and Instagram 'worse than drugs' says Miley Cyrus
Italian boffins agree with popette's theory that haters are the real wrecking balls
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Facebook to let stalkers unearth buried posts with mobe search
Prepare to HAUNT your pal's back catalogue
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.