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Hey IBM – Lenovo here. Sort your server factory strike out, will you?

Big Blue's problem - until server biz buyout deal closes

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Chinese PC maker Lenovo has shrugged its shoulders at a strike in a server factory in China, saying that it's up to IBM to sort out the dispute before its server business transfers to Lenovo later this year.

Yet Lenovo has said that it will keep the same salaries and benefits in place for Big Blue employees moving across.

More than a thousand workers went on strike last week in Shenzhen to protest over the terms of the deal with Lenovo, which is slurping Big Blue's server division for $2.3bn.

But the Chinese firm said that the 7,500 or so employees across 60 countries who come as part of the deal didn't need to worry.

"Part of the reason Lenovo is acquiring IBM’s x86 server business is to gain the tremendous talent and experience of its workforce, strong from top to bottom," the firm said in a statement.

"To ensure a smooth transition Lenovo is committed to provide opportunity for all employees from IBM’s x86 server department who transfer to Lenovo, without any reduction of their wages and benefits."

Since the deal hasn't actually been finalised yet as the companies are waiting on government and regulatory approval however, Lenovo said that IBM needed to deal with the strike. The protesting staff are worried about their pay under new management and about their severance package if they decide they don't want to work for Lenovo.

Over at Big Blue, chief exec Ginni Rometty has seen her take-home pay drop by 14 per cent in 2013, according to company filings. Rometty's base salary of $1.5m stayed the same, but she failed to get her cash bonus, which last year amounted to $3.9m, because of the drop in revenue at IBM.

Rometty's overall pay still came to $13.97m, compared to $16.2m in 2012. Other top execs including CFO Mark Loughridge and senior veeps like Steven Mills also dropped their bonuses.

"In view of overall results, Mrs. Rometty and her senior team recommended forgoing their annual incentive payout," the filing said.

IBM's revenue declined by 4.6 per cent last year. ®

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