IBM to layoff 5,000 jobs in US; While expand in India, China

IBM will cut about 5,000 jobs in the United States, adding to similarly large cuts in the past few months, sources with knowledge of the matter told media.

The job cuts will account for over 4 per cent of IBM's US workforce, which totaled around 115,000 at the end of 2008. The sources, who were not authorised to speak publicly on the issue, said the cuts will mostly be in IBM's global services business, which includes outsourcing and consulting services.

An International Business Machines Corp spokesman declined to comment. The company, which had a total workforce of 398,455 as of end 2008, has not disclosed how many jobs it has cut so far this year, but has said it was making "structural changes" to reduce spending and improve productivity.

IBM, which now earns around two-thirds of its revenue from outside the United States, has been expanding its workforce in emerging markets like India and China.

At the end of 2008, employment in the BRIC countries -- Brazil, Russia, India and China -- totaled around 113,000.

IBM has been hit by slower US technology spending, although it has fared better than many rivals thanks to its global footprint and a decreased emphasis on hardware sales.

A month ago, IBM affirmed its full-year forecast of $9.20 earnings per share, and said contract signings for its business services had grown so far this year.

IBM is in exclusive talks to buy Sun Microsystems Inc, according to sources familiar with the matter, a move that would create a clear leader in the high-end computer server market.

Agencies

BRIC will account for 40% of world growth by 2020

BRIC nations - Brazil, Russia, India and China - are likely to contribute 40 per cent of global economic growth in the next 10 years due to a "tectonic shift" in the distribution of global capital over the next decade, global consultancy firm Ernst & Young said.

"Companies and governments in the developed world have to face up to the reality that there will be a further shift in the economic balance of power in the years ahead," Mark Otty, Area Managing Partner (Europe, the Middle East, India and Africa) at Ernst & Young said.

In the latest research note titled 'For Richer, For Poorer Global Patterns of Wealth', Ernst & Young said emerging economies have seen their share of global output and wealth rise significantly over the last few years, driven by faster growth, rising income, high savings ratios, strong investment and export.

In the next decade, the BRIC countries are likely to contribute 40 per cent of global growth, while the US would account for around 14 per cent.

China is set to become the biggest economy in the world in public-private partnership terms by 2019 and by 2020 the BRIC countries would account for almost a third of global GDP - of which China will contribute 18 per cent.

E&Y projects that the BRICs would account for 65 per cent of global basic metals output by 2020 and here also China would account for the lion's share of growth.

According to the report, around 77 per cent of world reserves, totalling almost $ trillion, are held by emerging markets. Besides, cross-border private investment by emerging economies has been increasing as well.

Sources: Agencies