IBM planning major job cuts in Germany: union

Reuters News
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Posted: Feb 01, 2012 3:54 PM
IBM planning major job cuts in Germany: union

(Reuters) - International Business Machines is sounding out plans to cut thousands of jobs in Germany and other countries to improve costs and earnings, a German union official said.

"We have been aware of IBM's plans to cut jobs for some time," Christine Muhr, a labor representative on IBM Germany's board, told Reuters on Wednesday.

Scope and time frame were still unclear, she said, adding that IBM was planning to reduce the number of full-time employees and hire more temporary staff through projects advertised on the Internet.

German business daily Handelsblatt reported in its Wednesday edition that IBM was planning to cut up to 8,000 jobs in Germany.

It cited an IBM executive as saying that "in the end it could be that only 12,000 of currently 20,000 jobs will be left in the subsidiary."

Representatives at IBM headquarters in Armonk, New York, were not immediately available and a spokeswoman for IBM Germnay would only comment on the Handelsblatt report, saying the company did not comment on speculation.

According to German services union Verdi, no layoffs have been announced but Muhr said that IBM was already testing using temporary staff on projects in other countries.

Internally the restructuring has been dubbed "Generation Open" and staff that work for IBM on projects but are not full time are called "liquid players," according to an internal document seen by Reuters.

With the move, IBM aims to accelerate the speed at which it completes projects by 30 percent and reduce costs by a third, according to the document.

IBM offers a wide range of services, from analyzing data and helping cities manage traffic flow to mining social media data so retailers can tell which products will sell best.

IBM wants to deliver earnings of $20 per share by 2015.

This year it aims to reach at least $14.85 despite ongoing macro-economic concerns in Europe and expected currency headwinds. Its earnings in 2011 were $13.44 per share.

(Reporting By Hendrick Sackmann in Stuttgart, additional reporting by Nicola Leske in New York; Editing by Gary Hill)