IBM Cuts Official – But Well Underway

August 14, 2002 ( - After months of rumors and media speculation, International Business Machines (IBM) says it is cutting more than 15,600 jobs in its computer-services and microelectronics businesses.

Armonk, NY-based IBM said it will cut 14,213 jobs, mostly in its Global Services unit, which had about 150,000 employees as of the end of last year, according to Reuters.  Another 1,400 cuts will come from its microelectronics unit. 

However, more than half had already left the firm by June 30, according to reports.

IBM confirmed its intention to cut jobs when the computer giant reported Q2 earnings, but the particulars weren’t disclosed until its quarterly filing with the Securities and Exchange Commission (SEC).  The cuts, roughly 5% of its workforce, are the largest in a decade for Big Blue.

The cuts come in the wake of the planned acquisition of the consulting business of PriceWaterhouseCoopers – an acquisition that will add some 30,000 workers from that firm.

The cuts are concentrated in the company’s services unit, because it can most easily absorb the job losses in that area, analysts have said. In fact, 57% of the workers impacted by that decision had already left the firm by June 30.  IBM also said in the regulatory filing that about 3% of the 1,400 workers in its microelectronics business had left the company, with the rest expected to leave by the end of this month.

IBM overall had about 320,000 employees at the end of 2001, a number that is expected to be at 305,000 by the end of September – before the PWC additions.