IBM to cut up to 13,000 jobs

Computer giant IBM is to cut between 10,000 and 13,000 jobs, many of these in its European operations, as "restructuring actions" designed to improve company efficiency take effect in the next few months.

IBM hope that a "more globally integrated" operation will address problems of slower than expected market growth, particularly in Europe.

The computer giant expects that the cuts will feed through into operating cost improvements in the second half of the year.

As a result, IBM estimates that it will record a pre-tax charge of between $1.3 billion and $1.7 billion in the second quarter.

In a statement today IBM said that it planned to "realign its operations and organizational structure in Europe to improve the speed of execution and better meet the needs of its clients. The success of this strategy will depend on reducing bureaucracy and infrastructure in lower-growth countries and creating teams that can work across country borders, shifting more employees into direct client roles that support the company's plans to deliver higher-value services and products".

IBM's restructuring actions include voluntary and compulsory redundancies of between 10,000 and 13,000 posts worldwide.

The company said it had initiated discussions about these changes with local consultation bodies.

IBM plans to eliminate the need for a traditional pan-European management layer to coordinate activity and create a number of smaller, more flexible local operating units in Europe.

The company will consolidate much of the "service delivery workload" into fewer locations in Europe.

(SP/KMcA)