IBM May Trim 8,000 Staffers

IBM Corp. is expected to lay off as much as 8,000 workers, or 2.5 percent, of its U.S. workforce during the quarter.

While Big Blue is mum about the subject, analysts have speculated on various reasons for the cuts, most of which centered around the fact the company’s costs were too high compared to its newer curtailed sales.

Soundview Technology Group analyst Gary Helmig told Friday that layoffs could be as much as 10 percent of IBM’s U.S.-based staff. He said he expects the cuts to come in the firm’s Global Services, microelectronics and sales divisions, calling the endeavor a “meaningful drive” to improve their operations.

Rumors of the layoffs made their way on F** Thursday, a business doomsayer site where industry watchers and
media get both legitimate and false leads to stories. An anonymous poster reported that IBM is expected to pink-slip 10 percent of
its workforce on May 23, 2002.

The news is hardly a shock, as President Samuel J. Palmisano warned employees internally in April that the company would have to cut its operations. And IBM did shave its semiconductor business by 1,000 in November 2001.

However, until IBM’s pre-announcement of an earnings and revenue shortfall on April 8, many analysts and industry watchers had praised or marveled at how IBM has
withstood the fairly barren economy that had harmed so many other rivals.

IBM is certainly no stranger to cost-cutting. In January, the Armonk, N.Y. outfit said that electronics manufacturer Sanmina-SCI Corp. will take on a “significant portion” of its PC manufacturing needs. One month before that, the firm sold its fiber optic transceiver unit for a $340 million cash/stock combination
to JDS Uniphase Corp., and sold its GPS integrated
circuits (ICs) operation to RF Micro Devices Inc.

Helmig said there was no correlation between the pending layoffs and the unit sell-offs.

“It’s just another one of their strategies to improve top-line growth,” Helmig said.

Helmig said the world may find out more about the company’s position at IBM’s analyst meeting next Wednesday, May 15.

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