IBM will fold its consumer computer division into its business PC division and will shift workers, the company confirmed today.
The company plans to fold the consumer division with the IBM operation that makes business PC's, according to IBM executives.
"We are always looking for ways to revamp certain operations," says Bill Hughes, vice president of communications and personal systems at IBM. "The development and manufacturing of the home PC and business units will be consolidated to reduce overhead costs involved in maintaining two separate divisions."
As a result of the restructuring, layoffs are expected among hundred of employees involved in manufacturing and development. Although the company said that people will be "shifted", it would not confirm the number of layoffs.
James Firestone, who was brought in two years ago to head the consumer division, will retain control of sales and marketing, as general manager, consumer solutions. But he will lose control of design manufacturing and other management responsibilities for the Aptiva line, according to IBM.
The move to restructure follows severe losses in IBM's consumer PC market, which faced stiff competition from the under-$1,000 PC's sold by its competitors.
With IBM selling tens of thousands fewer Aptiva's each month than it planned, the company's losses are expected to exceed $300 million this year.
In an attempt to gain ground in the already booming sub-$1,000 PC market, IBM plans to unveil a new $999 Aptiva, without a monitor, in November.