IBM confirms buyout plan

IBM confirms earlier reports that it is offering a voluntary buyout program to some employees.

CNET News staff
2 min read
IBM (IBM) said today that it is offering voluntary buyouts to some employees, confirming earlier reports of the program.

An IBM spokesman said the company is offering the buyout to certain support staff in U.S. divisions who have been with the company for at least five years, according to Reuters news service. Those who accept the package will leave IBM by the end of the year.

"We are not giving any figures on the number of people we are offering the program to," the IBM spokesman told the news service. Earlier reports had indicated that the company would offer packages to as many as 5,000 employees.

Big Blue is targeting its voluntary package to employees who do not directly contribute to revenues, such as administrative personnel. At the same time, however, IBM is looking to expand other parts of the company.

"We always take a look at high-growth areas and where our needs are," IBM spokesman Fred McNeese told CNET in an interview this week. The company had earlier announced plans to hire 10,000 new workers for its services division.

"IBM is ahead of its target for our consulting and computer services area," McNeese said. "We expect to add more than 10,000 by the end of the year."

IBM, which had a peak of more than 405,500 employees worldwide in 1985, has cut its workforce to about 225,340 as of last year as the company continues to restructure.

In its last buyout package, employees received one week of salary for every year of service, to a maximum of 26 weeks of severance pay, McNeese said. IBM has set aside roughly $800 million to cut expenses throughout its worldwide operations this year, which will be used for the buyout packages.