New York-based IBM Corp. reportedly has made job cuts as part of an expected workforce rebalancing effort that's expected to cost the company close to $1 billion this year.
Lee Conrad, national coordinator for Alliance@IBM CWA Local 1701, an employee advocacy organization that wants union bargaining rights with IBM, said in an email that job cuts started Tuesday night, and there are expected to be more.
Research Triangle Park employees were affected, Conrad said, but he didn't know how many.
The first cut was to the company's Systems Technology Group, which affected 121 employees, according to the employee advocacy group. The segment is one that saw a 17 percent revenue decline in the first quarter.
In total in the quarter, the company's revenues were down 5 percent to $23.4 billion. Its net income, at $3 billion, was down 1 percent in the quarter.
A press release about the quarter's results said revenues for the company's services segment were down 4 percent, while software revenues were flat.
In a conference call with investors April 18 about the first-quarter financial results, Mark Loughridge, IBM's senior vice president and chief financial officer, said he expected workforce rebalancing action to be concentrated in the second quarter. That's according to a transcript of the call on Morningstar.com
Loughridge said the company is expecting charges of close to $1 billion this year related to the workforce rebalancing, up from last year's $800 million. He also said that like last year, the bulk of those charges would be outside the U.S.
"That means that the bulk of those dollars will be used for restructuring and rebalancing activities in countries outside the Untied States (larger impact overseas than in the U.S.)," said Doug Shelton, a spokesman for IBM, in an emailed response to questions.
Despite the reported cuts, IBM's total workforce has grown in recent years.
According to the company's annual report for 2012, IBM had 434,246 employees at the end of the year, up from 433,362 at the end of 2011 and up from 426,751 at the end of 2010.
"That indicates that 'cuts' as you call them aren't simply about lowering headcount costs -- it is about shifting skills, resources and focus from one line of business (e.g., a lower value segment) to another line of business (e.g., a higher value segment) like 'big data,' cloud, analytics and mobile -- where we might need more resources and/or different skills," Shelton said in the email.
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