IBM Cutting 15,000 Jobs

According to an SEC filing, IBM said the majority of the jobs targeted for elimination by late September were tied to its services business.

IBM is in the process of eliminating 15,600 jobs, or about 5 percent of its work force, by the end of next month, the company disclosed in a government filing Tuesday.

While the computer maker reportedly has been cutting workers for three months, IBM, of Armonk, N.Y., has refused to reveal how many jobs it planned to cut overall to compensate for declining sales blamed on a global economic slump.

In May, IBM CEO Sam Palmisano fueled speculation that the layoffs would be the largest at the company since the early 90s when he called one analysts estimate of 20,000 job cuts as an "absolutely appropriate at a macro level."

IBMs Global Services division, which has become one of the companys most profitable divisions in recent years, suffered the greatest number of cuts, with other lay offs occurring in the Microelectronics division, and server and software business units.

According to its SEC filing, IBM said the majority of the 14,213 jobs targeted for elimination by late September were tied to its services business. In another round of job cutting, the company said it eliminated 1,400 positions in Microelectronics division. Those workers were let go by June 30.

IBMs announced job cuts come less than a month after the company disclosed plans to buy the services unit of PriceWaterhouse Coopers for $3.5 billion. As part of the agreement, IBM also will be acquiring about 30,000 workers from the consulting firm.

At the end of 2001, IBM employed about 320,000 workers worldwide.

IBM, which thrived last year as its high-tech competitors stumbled amid a U.S. recession and downturn in consumer sales, finally saw its fortunes crumble as corporate customers slashed their IT spending this year.

In April, IBM issued an earnings warning that sales had fallen short of expectations. Later, the company posted a 32 percent drop in first quarter earnings from the previous year. Last month, the company took a $1.4 billion charge related to its ongoing layoffs and the shutting down of facilities.