IBM started laying off employees on Wednesday, Bloomberg’s Sarah Frier reports.
IBM said in April it plans to spend $1 billion on severance and other costs to shrink its work force.
Laurence Balter, an analyst at Oracle Investment Research who’s quoted in the Bloomberg story, said this would add up to between 6,000 and 8,000 jobs.
That range of layoffs “sounds about right,” IBM union organiser Lee Conrad told us. Conrad has been sounding the alarm on smaller IBM layoffs for months.
IBM is cutting all kinds of employees, from “rank-and-file staff to executives,” according to Frier’s sources.
The tech and consulting company had 434,246 employees worldwide at the end of 2012, so these cuts would amount to less than 2%.
IBM in April missed Wall Street’s estimates for the first time since 2005.
The company’s Research Triangle Park, N.C. location, where IBM does engineering for many of its server and storage products, reported 200 jobs cuts today, one IBM insider told us.
Needless to say, the mood there is grim.
“From what I saw at work today, IBMers were pale, antsy, and stressed out. It’s not pretty,” the IBM insider said.
IBM also shopped its low-end server business to Lenovo, but those talks fizzled last month.
In a videotaped speech to IBM employees after April’s earnings, CEO Virginia Rometty urged them to step up their game.
“Where we haven’t transformed rapidly enough, we struggled. We have to step up with that and deal with that, and that is on all levels,” she said in the video.
An IBM spokesperson declined to comment on the reported layoff numbers but sent us the following statement via email:
“Change is constant in the technology industry and transformation is an essential feature of our business model,” the spokesperson said. “Consequently, some level of workforce remix is a constant requirement for our business.”
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