With companies such as Motorola, AMD and SUN all cutting their respective work force, just to name a few, it comes as little surprise that IBM might soon follow suit. IBM (full disclosure, I used to work for them) has been successful on the balance sheets since before this economic downturn took hold. Now expectations are that IBM will report its first quarterly loss in some time.
From Forbes:
Despite an expected drop in sales, analysts predict that IBM’s earnings will rise about 8% to $3.03 per share for the quarter. The company’s relatively healthy profits are a result of careful cost-cutting at the computing giant, largely in the form of a cut in its pension plans two years ago. And though it maintained its earnings target in its last earnings announcement, the company may still be preparing for tighter times. A rumor that as many as 16,000 layoffs are coming–the equivalent of 4% of the company’s workforce–has persisted on the independent IBM employee site
IBMalliance.orgAllianceIBM.org, though IBM hasn’t confirmed the job cuts.
4% of the work force might seem small but, we’re talking about a company with roughly 400,000 staff. This is yet again an example of a lot of good folks that are pacing a hole through the floor. Now they wait and wonder as to their potential fate. The writing may be on the wall.
Bear in mind that this has not yet been confirmed by IBM.
UPDATE: (Jan 21, 2009) Well, I spoke about this on the 16th and it is hitting the fan now. Wall Street Journal has confirmed that IBM layoffs are underway.
