IBM cuts 13,000 employees, mostly in Europe

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Thursday May 05, 09:32

IBM cuts 13,000 employees, mostly in Europe

(by Olivia Cohen)

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IBM cuts 13,000 employees, mostly in Europe

IBM reported on Wednesday its decision to lay off up to 13,000 employees in an attempt to restructure its European operations and Global Services division that has to be built around high-margin business consulting. The layoffs will include up to 4 percent of Big Blue’s work force and will give it a second-quarter pretax charge of up to $1.7 billion. This is about 10% of the expected profit at Big Blue.

The company says it seeks to reduce the layer of pan-European management and construct its business around global teams instead of single-company operations.

Bob Moffat, IBM’s senior vice president of supply chain integration did not name specific countries where reductions are going to take place, but said that Europe will be thee most serious possible target for layoffs.

"Are we rebalancing resources into higher-growth markets?" said Moffat. "Absolutely. As any business would so do."

IBM spokesman John Bukovinsky announced that most of the cuts will be voluntary and reported that negotiations with workers’ councils have commenced.

"In Europe, we expect to reach most of the objectives through voluntary programs," Bukovinsky said.

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