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

Apple likely to unveil cheaper iPhone in 2009

Apple Inc will probably begin selling a lower-priced version of the iPhone in the first half of 2009, tapping a new chipmaker for a key component, according to Friedman, Billings, Ramsey & Co.

Qualcomm Inc will replace Infineon Technologies AG as the supplier of the baseband processor -- the chip that translates radio signals into voice and data -- in the new model, analyst Craig Berger said in a report. The phone might debut in the second quarter, he said, citing unidentified industry sources.

Apple may be turning to lower-cost products to fuel sales in developing countries as the US economy shrinks. The company is planning a smaller version of its Shuffle music player and a cheaper MacBook laptop, Berger said. None of the devices is likely to be ready to be unveiled at next week’s Macworld conference, where Apple typically makes product announcements.

“Mobile phone sales figures will continue to grow worldwide in 2009 and most of that growth will come from developing countries,” said Hakim Kriout, a portfolio manager at Grigsby & Associates, a New York-based securities trading firm that owns Apple shares.

“Turning the iPhone into a product line by adding another device for the lower end of the market is the next logical phase.”

Jennifer Bowcock, Apple’s spokeswoman for the iPhone, didn’t immediately return a call or email seeking comment. San Diego-based Qualcomm’s Bertha Agia also didn’t immediately return a phone call.

Wal-Mart, Best Buy
Apple currently sells two versions of the iPhone, an 8GB model for $199 and a 16GB device for $299. Wal-Mart Sto
res Inc, the world’s largest retail chain, began offering the product last week, with its starting price at $197. Best Buy Co, the biggest electronics seller in the US, sells the phone for $189.99 and $289.99.

Berger, who contacted parts suppliers, also said that Apple made fewer iPhones in the fourth quarter than originally estimated. That shortfall will be partially offset by greater first-quarter output, he said. About 10 million phones were available for purchase in the fourth quarter, he estimates.

Apple said this month that chief executive officer Steve Jobs won’t appear at the Macworld show, fuelling speculation that the company doesn’t have a significant new product to offer.

Apple will probably use the event to show updated versions of its aluminum-cased iMac desktop computers and a new operating system, Brian Marshall, an analyst at Broadpoint.AmTech in San Francisco, said.

Source: Agencies