Job Cuts, Closings Possible at IBM as Meeting Called
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NEW YORK — International Business Machines Corp. called a meeting for analysts Tuesday amid speculation that the company is going to announce job cuts and possibly the closing of one or more facilities.
IBM declined to comment about the substance of the meeting, but a spokesman indicated it would be important.
IBM has a 40-year tradition of no layoffs, and a senior IBM executive last week confirmed that the company would stick to that. However, if the company closed an operation such as a plant, office or distribution center, many employees might choose to quit rather than accept a transfer to a distant location.
Bob Djurdjevic, president of Annex Research Inc. in Phoenix, predicted that IBM might announce plans to eliminate about 20,000 jobs, paying for the streamlining program with a charge of perhaps more than $1 billion against fourth-quarter earnings.
“IBM has been competing with a layer of fat around the waist for too long,” Djurdjevic said. He said he thought trimming of sales forces was more likely than facility closings.
IBM normally reduces employment by offering financial incentives to employees to quit or take early retirement. Earlier this year, the company began its third such program in three years, hoping to trim 600 to 1,000 manufacturing jobs.
IBM’s stock rose $2.125 a share to close at $99.25 Monday on the New York Stock Exchange. The stock peaked at $175.875 in August, 1987.
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