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IBM cuts 15,600 workers amid global sales drop

IInternational Business Machines Corp said it has cut 15,600 jobs, or less than 5 percent of its staff, as the world's largest computer maker cuts costs to cope with a drop in sales and profit.

IBM has said it was reducing its payroll, which stood at almost 320,000 employees at the end of last year. The company didn't reveal the size of the cuts until today, when they were disclosed in a quarterly report with the Securities and Exchange Commission. Analysts had estimated the job cuts at 10,000.

Chief Executive Sam Palmisano is firing workers to cope with what he has called the most difficult environment in a decade.

IBM, also the biggest seller of computer services, last month reported lower second-quarter profit and sales as demand for computers, semiconductors and data services declined. Sales in each of the previous two periods missed forecasts by US$1 billion.

"You want them to be responsive to help the bottom line as much as possible," said Jeanie Wyatt, the head of South Texas Money Management Ltd, which manages US$150 million and owns shares of IBM.

IBM is trying to reduce expenses by as much as US$2 billion this year after five straight quarterly declines in sales from a year before. In addition to paring staff, IBM has sold plants and agreed to sell its hard-disk drive business to Hitachi Ltd for US$2.05 billion. The business had a loss, before taxes, of US$423 million last year.

About half of the fired workers already have left the Armonk, New York-based company, and all were notified by June 30, the company said in the SEC filing.
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