IBM staff await news of 13,000 job cuts

Employees of computer giant IBM are waiting to hear details today of up to 13,000 job cuts, mostly across Europe.

Computer giant IBM is to axe up to 13,000 jobs, mostly in Europe, in a widely-expected move to restructure its operations to make them leaner and nimbler - and taking a second quarter charge in the process.

IBM currently employs about 3,700 people in Ireland, most of them at its facility in the Mulhuddart area of west Dublin, 25,000 people in the UK and has 100,000 staff across Europe.

It is expected that the company's Irish staff will be offered redeployment rather than redundancy packages.

International Business Machines said last night that the pre-tax charge would amount to between $1.3bn and $1.7bn (€1bn-€1.3bn).

The majority of the 10,000-13,000 redundancies are planned for Europe, where the company began cutting jobs even before it announced its disappointing first-quarter earnings last month. In March, IBM laid off 500 Swedish workers, 9% of its workforce there, and shut down most operations in five cities.

The cuts, which will affect 3-4% of IBM’s 329,000-strong workforce, are in line with analysts’ predictions.

IBM surprised investors in April when it missed first-quarter earnings estimates by five cents a share. Chief financial officer Mark Loughridge said during the earnings conference call that the company planned a “sizeable restructuring”.

“European sales seemed particularly disrupted as rumours flared in the final weeks of the quarter,” Goldman Sachs Group analyst Laura Conigliaro wrote in a report last month.

IBM said it would run fewer services offices worldwide and reduce European managers.

“As a result, IBM will create a number of smaller, more flexible local operating units in Europe to increase direct client contact,” a company statement said. The company said it would discuss more details of the restructuring in a webcast today.

IBM said it would realign operations in Europe to reduce bureaucracy in lower-growth countries.

Sales in France, Germany, Italy and Japan, which account for one-quarter of the company’s revenue, were down 5% in the first quarter.