IBM dismisses Forbes report of massive layoffs

The jobs will be cut as IBM undergoes a massive restructuring in a "desperate"' attempt to revamp its business, according to the Forbes report. -- PHOTO: EPA
The jobs will be cut as IBM undergoes a massive restructuring in a "desperate"' attempt to revamp its business, according to the Forbes report. -- PHOTO: EPA

NEW YORK (Reuters) - IBM dismissed on Monday a Forbes magazine report claiming the technology firm is preparing to cut as many as 112,000 jobs or 26 per cent of its workforce, which would represent its biggest-ever layoffs.

IBM is cutting jobs, as disclosed in its latest earnings report last week, but those reductions will affect "several thousand" employees, a "small fraction" of what Forbes reported, according to an emailed statement from IBM to Reuters.

The technology giant has been steadily reshaping its 400,000-plus staff for several years, laying off workers in some areas and hiring in new growth businesses.

A report last Thursday on Forbes' website by pseudonymous Silicon Valley technology gossip columnist Robert Cringely said IBM planned to break with that gradual approach and suddenly lay off 26 per cent of its global workforce.

The jobs will be cut as IBM undergoes a massive restructuring in a "desperate"' attempt to revamp its business, according to the Forbes report.

IBM did not issue a categorical denial of the report, but strongly suggested it was inaccurate.

"IBM does not comment on rumors, even ridiculous or baseless ones," the company said in the email. "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 US$600 million 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 US$580 million, 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 does not disclose the amount of layoffs it makes each year, but one Wall Street analyst estimated that this year's restructuring charge suggests about 8,000 people, in line with recent years.

IBM has struggled to shift from its traditional strength of making computers to offering IT services and information storage. Last week it reported quarterly profits below analysts' forecasts and an 11th straight quarter of falling revenues.

The tech giant is now preparing to merge its three main arms - hardware, software and support - into a single operating business, and reorganise staff into teams based on their jobs, such as sales or research.