Chicago (IL) – A bizarre rumor is making the rounds on the Internet – that IBM could be planning to fire more than 100,000 of its 350,000 employees. There isn’t a whole lot of substance to that rumor as of now, but sources told TG Daily that some of IBM’s operations may be in need of a restructuring, which in fact could result in massive layoffs.
From the outside, there is very little indication that IBM could be heading into a dramatic restructuring phase. Besides the fact that IBM has lost the title of the world’s largest IT company (from a revenue perspective) to HP in 2006, with the margin widening in the first quarter of the year, the firm’s business has remained very profitable: In 2006, profits reached $9.4 billion (HP: $6.2 billion) on revenues of $91.4 billion (HP: $91.7 billion). In the first quarter of this year, the company still managed to earn $1.8 billion, but revenues fell far behind HP - $22.0 billion vs. $25.1 billion.
I,Cringely reported that 1300 employees of IBM’s services division were let go early last week – a number we were able to confirm through three different industry sources familiar with these events. I,Cringely also mentioned that this could be just the beginning of a more dramatic move that could affect more than 100,000, possibly up to 150,000 IBM employees. If the company were to lay off 150,000 of its people, IBM would end up with around 200,000 employees – still substantially above the number of HP’s employee base (156,000).
IBM has not addressed the rumored layoffs so far.
Source: TG Daily