IBM furloughs US employees to cut costs

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International Business Machines Corp (IBM) has said it’s requiring the majority of U.S. employees in its hardware unit to take a week off with reduced pay, cutting costs as demand slows for products such as servers.

Bloomberg News reports that U.S. hardware workers, including those involved in development and procurement, will take a furlough week with one-third pay starting either August 24 or 31, said Jay Cadmus, a spokesman for the Systems and Technology Group.

Executives in the division will take no pay during the week.

The world’s biggest computer-services company is trimming expenses to preserve profit margins as hardware revenue continues to decline.

IBM spent $1bin to restructure its workforce, cutting more than 3,300 employees in the U.S. and Canada, according to Alliance@IBM, an employee group. IBM doesn’t disclose the number of employees by country or by division.

IBM was in talks earlier this year to sell parts of its server division to Lenovo Group, people familiar with the discussions have said. The negotiations broke down in early May due to disagreements over price.

Hit the link below to access the complete Bloomberg article:

IBM Furloughs U.S. Hardware Employees to Reduce Costs

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