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First Dell, now IBM: 15,000 jobs face the axe at Big Blue, says union

'Workforce rebalancing' will take place in the first quarter

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IBM is set to spend another $1bn on job cuts this year to eliminate an estimated 15,000 jobs worldwide, according to trade union Alliance@IBM.

The company has already spent the same amount of money last year on 'workforce rebalancing', its euphemism for redundancies.

Big Blue's chief financial officer for finance and enterprise transformation, Martin Schroeter, has admitted there would be more cuts in 2014, during the announcement of IBM's fourth quarter earnings last month.

"As we look forward to 2014, we’ll continue our transformation, shifting our investments to the growth areas, and mixing to higher value. We’ll acquire key capabilities, we’ll divest businesses, and we’ll rebalance our workforce, as we continue to return value to shareholders," he said.

"In the first quarter, we expect the initial closing of the sale of our customer care business, and to take the bulk of our workforce rebalancing actions, which we’re currently working on."

The employee redundancies are part of IBM's ongoing mission to hit its target of $20 earnings per share, a target that saw the company sell off its server business to Lenovo at the start of the year.

"We’ll see the benefits of the first quarter rebalancing action later in the year," Schroeter said. "As a result, we expect our first quarter EPS to be about 14 per cent of the full year, reflecting the modest gain, workforce rebalancing charge, and continued impact from currency."

Lee Conrad, coordinator of Alliance@IBM, said that the Lenovo sell-off was another blow to IBM staffers.

"The hits just keep coming. Following the news that job cuts will happen this quarter, the latest is that IBM will sell one of its server units to Chinese company Lenovo. 7,500 workers worldwide will be impacted and moved out of IBM," he said.

UNI Global Union and the UNI IBM Global Union Alliance, which represent IBM union members in 21 countries, have denounced the firm's plans to lay off more workers.

"IBMers remain the company's biggest asset, and should be in the forefront of any change. Alternatives to layoffs exist for companies looking to cut costs," they said.

IBM did not respond to a request for comment. ®

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