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IBM lays off workers in Global Services

Big Blue has notified at least a small number of employees in its Global Services Division that their jobs will be eliminated, a representative says.

IBM has notified at least a small number of employees in its Global Services Division that their jobs will be eliminated.

A company representative confirmed the action on Wednesday but would not discuss the number of employees affected. The workers will have 30 days to find a different job within the company before being laid off, the representative said.

Global Services, which tackles technology-related tasks for customers, was rebalancing its pool of employees based on how their areas of specialization match current and upcoming projects, the representative said. The representative said such rebalancing is a routine practice for the company.

Though IBM would not specify the number of cuts, it appeared to be fairly small, especially compared with the overall Global Services head count, which numbers about 150,000 employees.

Lee Conrad, national coordinator for Alliance@IBM, a union for IBM workers, said the group had so far learned of about 170 Global Services layoffs around the country, including approximately 140 at IBM's massive Research Triangle Park campus in North Carolina. But more could be in the offing at other IBM locations, he said.

"We don't yet have a clear picture of how many are affected," Conrad said. Alliance@IBM said the company began notifying employees of the Global Services layoffs Wednesday morning.

The layoffs come at a sensitive time for the computer giant. Following lower-than-expected first-quarter earnings, Big Blue began eliminating jobs in its server division last week, starting what is anticipated to be a fairly large number of layoffs--ultimately as many as 9,000 job cuts, mainly in the United States, analysts have said.

IBM notified approximately 1,000 employees in the server division that their jobs would be cut, according to Alliance@IBM. The union also believes another 900 employees in various IBM business groups, such as software, were also notified last week that they must find other jobs within the company or be laid off.

However, last week's cuts and this week's Global Services layoffs add up to only a little more than 2,000, far fewer than the 9,000 predicted by analysts.

IBM would not confirm the number of server division jobs to be eliminated, but several positions will be cut at the company's facilities in Rochester, Minn., where its iSeries servers are designed, according to spokesman Tim Dallman. Dallman said about 150 positions out of a total of 5,000 are being cut at the site.

The server cuts are the result of work to share server technologies across IBM's four server lines, Dallman said. Notified employees stay on IBM's payroll for 30 days, he said, and are eligible to apply for other IBM jobs.

Though employees are losing jobs, no specific programs are now being cut, another representative said. Some employees are being offered the chance to move to new locations if their server research and development work is being consolidated in a different place, the representative added.

The layoffs come as no surprise after IBM Chief Executive Sam Palmisano told Wall Street analysts earlier this month that the company needed to cut costs. Palmisano became IBM's CEO in March.

"There are other areas of our business that we need to be more efficient in. We know it," Palmisano told attendees at the company's spring analyst meeting in New York earlier this month. "You'll hear more about what we are doing to address those issues to get more efficient."

All told, the company could shed as many as 20,000 jobs through attrition and by spinning off or selling unprofitable businesses. For example, Big Blue inked a preliminary agreement with Hitachi to merge the two companies' storage divisions and create a standalone joint venture.

Typically, IBM loses as many as 15,000 employees through attrition alone each year, executives have said.

IBM started 2002 with just less than 320,000 employees.