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IBM planning reduction of workforce and restructuring actions
Posted on 5-May-2005 15:17. | Tags Filed under: News.

Computer and services company IBM has announced plans to implement a series of restructuring actions designed to improve the company's efficiencies, strengthen its client-facing operations and capture opportunities in high-growth markets.

According to information provided by the company, the actions will accelerate progress toward more globally integrated operations, while addressing profitability in slower-growth regions, primarily in Europe. These actions will also allow IBM to shift resources to higher-growth markets and opportunities such as Business Performance Transformation Services.

As a result, IBM estimates that it will record a pre-tax charge of between US$1.3 billion and US$1.7 billion in the second quarter. The company expects to realize benefits starting in the second half of the year.

The company will work to reduce bureaucracy and infrastructure in lower-growth countries and creating teams that can work across country borders, shifting more employees into direct client roles that support the company's plans to deliver higher-value services and products. IBM plans to create a number of smaller, more flexible local operating units in Europe to increase direct client contact.

On a worldwide basis, IBM plans to improve the efficiency of its services operations by consolidating much of the service delivery workload into fewer locations by using standard job roles, processes and tools.

IBM's restructuring actions include voluntary and involuntary workforce reductions of between 10,000 and 13,000 employees worldwide. The majority of the overall workforce reductions are planned for Europe, and the company has initiated discussions of these changes with local consultation bodies.

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