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IBM's newest cost-cutting scheme is eliminating its program that lets employees working from home claim internet access as a business expense, according to InformationWeek.

An internal memo reportedly sent to IBM employees and obtained by the publication states employees worldwide can no longer obtain reimbursement for internet service beginning May 1.

When asked for comment, IBM spokesman Fred McNeese told El Reg the company has made no announcement to employees, along with the standard "we don't comment on rumors or speculation" line.

According to InformationWeek's memo, the program was originally set up in the 1990s, when home internet access wasn't considered a basic utility.

"Today Internet access has become pervasive around the world and in-home Internet contracts have become commonplace along with cable and other telephony services," IBM allegedly wrote in the employee memo.

McNeese told us that about 40 per cent of IBM's employees worldwide work from non-IBM locations, including client locations, homes, and alternative work sites. The company wouldn't break the figure down further. According to IBM's annual report, it had 398,000 workers worldwide at the end of 2008.

IBM confirmed it cut about 5,000 jobs in the US last week — mostly from its services division — in its continued efforts to shave expenses. IBM exec speak for the layoffs is "resource actions" internally. Although the division has been a steady source of profits for Big Blue, the company appears to be shifting the work to lower cost countries like India.

Earlier this month, IBM imposed a 10 per cent cut in contractor day rates.

IBM's cuts have become particular contentious amongst employees now that the company is in talks for a $8bn takeover bid for Sun Microsystems. ®

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