IBM to cut 10,000 jobs

Daily Newsletters

Sign up to ZDNet UK's daily newsletter.

Topics

Job cuts, IBM

NEWS

IBM plans to cut between 10,000 and 13,000 positions worldwide and to reorganise its management structure.

The changes, which will mostly affect IBM's European operations, will result in a charge of between $1.3bn and $1.7bn in the second quarter this year and "yield benefits" in the second half of the year, the company said on Wednesday.

The restructuring, a significant move for the company, was expected following the firm's disappointing first-quarter 2005 earnings. Last month, IBM chief financial officer Mark Loughridge said the company would undergo a "sizable restructuring" to address weak areas, notably in Europe.

IBM said employee reductions will include both layoffs and voluntary departures. The majority of the cuts will be in Europe, where the company has initiated discussions with unions.

The reorganisation involves the streamlining of management in Europe. IBM said it will eliminate its pan-European management layer to reduce internal bureaucracy.

"IBM will create a number of smaller, more flexible local operating units in Europe to increase direct client contact," the company said in a statement.

The plan also calls for IBM to move some of its European personnel who work in its IBM Global Services division and consolidate them in fewer locations worldwide.

Loughridge will offer more details about the restructuring on Thursday morning, the company said.

Talkback

"IBM said it will eliminate its pan-European management layer to reduce internal bureaucracy."

This can be A Good Thing. IBM is top-heavy with unnecessary layers of management. However, at the grass roots level, first-line managers are overburdened with work, and many of the nonmanagement employees are grossly overworked. Can those working Beamers really continue to produce the high quality of products that has made IBM famous?

Cut back too far, and disaster awaits, as was experienced at Lloyds Register of Shipping in the 1970s. There, at LR, one manager was so determined to cut costs that, each time an employee left or fell ill victim to a stress-related illness, he simply spread that surveyor's work among the remaining staff, until about half of the department was off sick, suffering from stress-related illnesses.

I hope that those 13,000 employees are all from middle management, rather than from among the people who actually do the work. I hope also thatsome of the vast sums of money saved by no longer paying the salaries of those managers will be used to employ more working Beamers, to help produce products and services of the quality that one associated with IBM.

The idea of "moving" Global Services employees (or any employees) is a traditional ruse that IBM employs, to get rid of people. Those who have "outside" interests, those whose personal interests lie in a particular community, will choose to leave the company, rather than move to a new location. One IBM senior manager once proudly boasted, when he announced the closure of a software development location, that he had moved his children to several different schools, over the preceding years, to accommodate IBM's wishes. I wonder whather he ever discovered that there are more important things in life than the status quo of his own superior managers. Therefore, many Global Services personnel are likely to leave the corporation.

IBM used to claim that it was a multinational corporation. Are we seeing its return to a mere interational company, based in and wholly run from New York?

via Facebook 5 May, 2005 11:58
Reply

Another businessman decides to trash 10,000 and lives, and will he be charged with crimes against humanity? If these trashed workers are in management, how many are in their 50s and so unlikely to ever find a good job again? Why not trash IBM's directors instead? Because having to pay them bonuses for jobs poorly done would cost too much. 10,000 lives -- who will write a news story about those?

via Facebook 5 May, 2005 15:59
Reply

Post your comment

In order to post a comment you need to be registered and logged in.

You can also log in with Facebook. Log in or create your ZDNet UK account below

  • Login

Will not be displayed with your comment

By signing up for this service, you indicate that you agree to our Terms and Conditions and have read and understood our Privacy Policy. Questions about membership? Find the answers in the Community FAQ

Get ZDNet UK's daily newsletter

Enter your email address to sign up

ZDNet UK Live

TerryRK

Well it seems there is something a number of us agree on. Why is the Ubuntu Unity launcher so ugly? I thought perhaps it was something to do with...

49 minutes ago by TerryRK on A tale of two distros: Ubuntu and Linux Mint
Freebies202

Duplicate comments are not made intentionally. Its very good to know that now you are keeping check on this problem because sometimes a commenter...

10 hours ago by Freebies202 on Microsoft fixes blog comments, speeds up blogs with open source
kevinmchapman

"the very significant number of users" and "many (most) of us" - you have no evidence for these statements. It is a fact that most users are saying...

18 hours ago by kevinmchapman on A tale of two distros: Ubuntu and Linux Mint
Marg Menzies Harrison

Another grammar faux pas is the improper use of "you". When sitting down down in a restaurant, for example, I get cringe when the waitress...

20 hours ago by Marg Menzies Harrison via Facebook on 10 flagrant grammar mistakes that make you look stupid
zdnetukuser

And NOW, folks, for Canonical's next trick... Kubuntu is late. Here's a pencil. Draw your own conclusions. cf.:...

20 hours ago by zdnetukuser on Linux Minterface
Moley

@kevinmchapman. The discussion here reflects the very significant number of users who really do like the traditional menu system and who wish to...

22 hours ago by Moley on A tale of two distros: Ubuntu and Linux Mint
kevinmchapman

Er, no... It is an efficient means of finding the application/file/setting you need in one place. The icons are a simply a fallback for when you...

24 hours ago by kevinmchapman on A tale of two distros: Ubuntu and Linux Mint
TerryRK

Isn't the provision of a text based search an admission by the developers that the mass of icons approach does not work? I don't need to use a...

1 day ago by TerryRK on A tale of two distros: Ubuntu and Linux Mint
kevinmchapman

"Unity and GNOME 3 both abandon the old text-based cascading menus in favour of a graphical icon-driven system." Point truly missed. Both use a...

1 day ago by kevinmchapman on A tale of two distros: Ubuntu and Linux Mint
TerryRK

whs001 - Thank you, I'm glad you liked the article. I absolutely agree with you on your first point. I should perhaps have made it clearer that...

1 day ago by TerryRK on A tale of two distros: Ubuntu and Linux Mint
Dennis Nilsson

If we allow corporate interest to dictate the way our government circumvents due process against foreign entities then we should accept the same...

1 day ago by Dennis Nilsson via Facebook on ACTA stumbles in Germany
GHar123

I totally dislike pirating of works, I fear that artists will be deterred from creating works if they think that they are going to get ripped off....

1 day ago by GHar123 on ACTA stumbles in Germany
JCB33

How dare film makers, artists or anybody that invests in creativity stop us pirating their works for free. I want to be able to walk into my local...

1 day ago by JCB33 on ACTA stumbles in Germany
Moley

@GrueMaster. I prefer horses for courses rather than one size fits all. I, and I suspect most other computer users, do not really wish to have...

2 days ago by Moley on A tale of two distros: Ubuntu and Linux Mint
greycynic

The product that scares me every time I have to use it is the Office 2007 version of Excel. The first bug that I found was applying the median...

2 days ago by greycynic on Ten flawed products that derail productivity
GrueMaster

Nice review and very informative. One thing I'd like to add (in reply to whs001's 1st question), the main reason to have the same interface from...

2 days ago by GrueMaster on A tale of two distros: Ubuntu and Linux Mint
Frederick Wrigley

I'be been using Mint 12 since the RC came out, and I am far more happy with the Cinnamon, the Mate, and, yes (with extensions), theGnome 3...

2 days ago by Frederick Wrigley via Facebook on A tale of two distros: Ubuntu and Linux Mint
bdantas

Excellent article. One small correction, though--although a fresh installation of Linux Mint 12 will, indeed, provide the user with a version of...

2 days ago by bdantas on A tale of two distros: Ubuntu and Linux Mint
Alan Ralph

In related news, the ISPs club together to get the members of the Home Affairs Select Committee (ya goofed on that part, ZDNet UK) copies of "The...

2 days ago by Alan Ralph via Facebook on MPs urge ISPs to take down terrorist material
Alan Ralph

In related news, the ISPs club together to get the members of the Home Affairs Select Committee (ya goofed on that part, ZDNet UK) copies of "The...

2 days ago by Alan Ralph via Facebook on MPs urge ISPs to take down terrorist material