IBM cutting 15,000 jobs
Published: 14 Aug 2002 09:45 BST
The computer giant disclosed the number as part of its effort to comply with new accounting directives. Layoffs began earlier this year as a way to cut costs, but the company until now had not specified the extent of the job cuts.
The cuts come to approximately 5 percent of the approximately 300,000 employees that IBM employed at the beginning of the year. The company began to cut jobs at the beginning of the year and reiterated in its second-quarter conference call that further cuts would be coming, an IBM spokeswoman said.
The company took a $767m (£498m) pretax charge in the second quarter to cover the expense.
In total, IBM will eliminate 15,613 jobs, a spokeswoman said. About 1,400 jobs will be eliminated in the microelectronics group. The division has completed about 3 percent of those cuts, with the remainder to occur by the end of August.
The remaining 14,213 cuts will largely come from the services group. Approximately 57 percent of the employees have already left with the remainder to leave by September, she added.
The job cuts exceed earlier analysts estimates, which hovered around the 9,000 level.
Big Blue will also shed a number of jobs through sell-offs. Approximately 18,000 employees left IBM with the transfer of the assets of its hard-drive division to Hitachi. Another 2,000 will leave the company in a transfer of an Endicott, New York, chip facility.
The computing behemoth reported an actual profit of just $56m, or 3 cents per share, after charges for the quarter, which ended 30 June. Revenue for the three-month period came in at $19.7bn. The figure reaches $20.3bn when including revenue from discontinued operations. But excluding a charge of 81 cents per share for costs associated with the company's exit of the hard-drive business, layoffs and other divestitures, IBM turned a profit of 84 cents per share for the quarter, beating expectations.
Last year, IBM posted a profit of $2bn, or $1.15 per share, in the second quarter. This year's $19.7bn in second-quarter revenue ($20bn including $379m in revenue from the hard-drive business) was also down from the $20.8bn recorded in the same period a year ago.
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