IBM has issued a strong rebuke to a report that it is preparing to cut more than a quarter of its global workforce.
“To fix its business problems and speed up its ‘transformation’ … about 26% of IBM’s employees will be getting phone calls from their managers. A few hours later a package will appear on their doorsteps with all the paperwork. Project Chrome will hit many of the worldwide services operations,” wrote Robert Cringely wrote, claiming that the dismissals will take place by the end of next month.
IBM said it did not comment on “ridiculous” speculation, but strongly suggested it was inaccurate.
“IBM does not comment on rumors, even ridiculous or baseless ones,” the company said. “If anyone had checked information readily available from our public earnings statements, or had simply asked us, they would know that IBM has already announced the company has just taken a $600m charge for workforce rebalancing. This equates to several thousand people, a small fraction of what’s been reported.”
Last week, Chief Financial Officer Martin Schroeter told investors on IBM’s fourth-quarter earnings conference call that the company was taking restructuring charges of around $580m (£384m), but he did not specify the number of jobs affected.
“We are not going to replicate the same level of restructuring that we had last year,” Schroeter said in response to a Wall Street analyst’s question. “It will be a lower amount.”
IBM’s fortunes contrast starkly with those of rival Apple, which is expected to unveil bumper sales of its iPhones and desktop computers on Tuesday.
Known as Big Blue for its once-ubiquitous corporate logo, IBM struggled to make the transition from manufacturing computers and microchips to the world of cloud computing. Last week, Ginni Rometty, chief executive since 2012, reported quarterly profits below analysts’ forecasts and an 11th straight quarter of falling revenues.
Annual revenue fell to $93bn (£62bn) last year from $107bn three years earlier as the company shed businesses such as its unprofitable chip design and manufacturing arm. IBM, once an industry pioneer, is still the world’s biggest computer technology company, but it has failed to produce income from consulting, security software and analytics to make up for declining revenues from its old operations.
The company last year scrapped a $20-a-share earnings target. The goal was set in 2010, shortly before Warren Buffett decided to invest $10bn in IBM.
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