IBM’s manpower being cut for the first time in a decade in an attempt to meet profit goals

February 26, 2014 9:18 am

The number of employees working for the information technology company International Business Machines Corp. has declined for the first time in ten years due to the fact that the company, which is currently known as the largest computer-services provider in the world, has cut its costs in order to meet its income goals.

According to a official filing, 431,212 employees worked for International Business Machines Corp. at the end of last year. These figures are said to be 0.7% less than the number of employees who worked there in 2012.

One billion dollars were spent by the company in 2013 for labour force restructuring. The same move is planned by the company over the current quarter of the year.

The company made an announcement on Monday this week that 3,100 high-tech jobs are planned to be kept by it in the north part of New York. It also revealed that about 500 new jobs are planned to be added in Buffalo. International Business Machines remains devoted to high-tech jobs at plants for semiconductors situated in Albany, Yorktown Heights and Dutchess County, which is proven by the pact between the company and the State University of College of Nanoscale Science and Engineering in New York.

The office of the Governor of New York – Andrew Cuomo – revealed that IT staff will be trained and educated there, and the place will be used to develop high-tech software for genomics, energy efficiency development, molecular research, etc. Five hundred information technology jobs are to be created by the company in Buffalo as one of the main clauses in the deal, which was announced on Monday.

Alliance@IBM, which is an employee group, reported that the layoffs in Asia, Europe and South America have already begun, and the workers of the company in the U.S. and Canada are expected to get notification about the process today. Almost 700 jobs in Dutchess County were cut by International Business Machines Corp. in 2013 from the total number of 7,000.

International Business Machines’ target is 20 dollars per share in adjusted earnings by 2015. However, the seven straight quarters of decreasing revenue made such a goal difficult to reach. Employees have been dismissed and furloughed by the company under the lead of Chief Executive Officer Mrs. Ginni Rometty. Other measures taken by the company in its attempt to meet goals are: assets selling, cutting tax rate and shares buy-backs.

The company did not immediately respond to a request for comment. Later, International Business Machines Corp.’s spokesman Doug Shelton refused to make any comments on the number of job cuts that are planned by the company, as well as on their timing.

International Business Machines Corp.’s shares fell by 0.12% on Tuesday to settle at $183.23 in New York, marking a one-year change of -7.99% and market capitalization of $190.8 billion. According to CNN Money, the 22 analysts offering 12-month price forecasts for International Business Machines Corp. have a median target of $190.00, with a high estimate of $235.00 and a low estimate of $160.00. The median estimate represents a +3.69% increase from the last close.

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