Is IBM likely to layoff 16,000 jobs?

International Business Machines Corp, the biggest technology employer, may cut thousands of jobs this month amid the global economic slowdown, according to the employee group Alliance for IBM.

Employees have been hearing that layoffs will take place in late January, said Lee Conrad, national coordinator of the Alliance, an organization seeking union recognition at Armonk, New York-based IBM. The size of the reduction may be larger than those in the past few years, he said in an interview.

Generally they go in batches of a couple hundred here and a couple hundred there,” Conrad said.
A post on the Alliance’s website said the company may cut 16,000 jobs, which would top the 15,600 eliminated by Chief Executive Officer Sam Palmisano in 2002. The worldwide slump has tightened companies’ technology budgets and IBM may report a 1.6 per cent drop in sales last quarter to $28.4 billion, based on the average analyst estimate.

“There’s likely to be production cutbacks at IBM,” said Timothy Ghriskey, chief investment officer at Solaris Asset Management LLC in Bedford Hills, New York. “There will be job cuts. For now, reducing the workforce to benefit the viability and competitiveness of the company makes sense.”

Solaris, which oversees $2 billion, held 29,000 shares of IBM as of Sept 30.

IBM rose $2.41, or 2.8 per cent, to $89.23 at 4 pm in New York Stock Exchange composite trading. The shares lost 22 per cent last year.

‘Rebalance our workforce’ IBM has frequently pruned its staff over the past few years. The company had two waves of job cuts in 2007, totaling more than 2,000 positions. IBM had $318 million in job-reduction costs that year, compared with $272 million in 2006.

“We constantly rebalance our workforce and continue to invest in growth areas,” said Ian Colley, a company spokesman. He declined to comment further when asked about the Alliance posting.

IBM had 386,558 employees at the end of 2007. Palo Alto, California-based Hewlett-Packard Co, the world’s largest personal-computer maker, had 321,000 as of Oct 31, and Panasonic Corp, based in Osaka, Japan, had 313,594 as of Sept 30.

Agencies