IBM: 100,000 Lay-Offs?
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Price: $289.52 +1.14%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.6%
EPS Growth %: +7.5%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.6%
EPS Growth %: +7.5%
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From 247WallSt
The Inquirer and a columnist at PBS are reporting that IBM (NYSE: IBM) may be plannning to lay off as many as 100,000 to 150,000 members of its US workforce. The reason would be that most of them could be re-hired as consultants at lower fees and without benefits. The potential plan is possible because of the growing number of people IBM has in India and China. The project, which IBM apparently calls LEAN is a plan to cut IBM costs by billions of dollars: "LEAN is about offshoring and outsourcing at a rate never seen before at IBM." According to the PBS reporter: "The BIG PLAN is to continue until at least half of Global Services, or about 150,000 workers, have been cut from the U.S. division."
Whether firing this many people and moving their functions to India or bringing some back as consultants is even possible is very tough to gauge. Issues of time zone, proximity, and morale can't be known before hand.
IBM's stock is flat with where it traded in early 2004. The company has about 375,000 employees worldwide. Cuts of this magnitude would be an awful risk, but it may take that to get the market to look at IBM as a grow company again.
And, if IBM moves forward, why no HP(NYSE: HPQ), Yahoo! (NASDAQ: YHOO) or Cisco (NASDAQ: CSCO)? There could be no end to it.
Douglas A. McIntyre
For more market insight go to http://www.247wallst.com/
The Inquirer and a columnist at PBS are reporting that IBM (NYSE: IBM) may be plannning to lay off as many as 100,000 to 150,000 members of its US workforce. The reason would be that most of them could be re-hired as consultants at lower fees and without benefits. The potential plan is possible because of the growing number of people IBM has in India and China. The project, which IBM apparently calls LEAN is a plan to cut IBM costs by billions of dollars: "LEAN is about offshoring and outsourcing at a rate never seen before at IBM." According to the PBS reporter: "The BIG PLAN is to continue until at least half of Global Services, or about 150,000 workers, have been cut from the U.S. division."
Whether firing this many people and moving their functions to India or bringing some back as consultants is even possible is very tough to gauge. Issues of time zone, proximity, and morale can't be known before hand.
IBM's stock is flat with where it traded in early 2004. The company has about 375,000 employees worldwide. Cuts of this magnitude would be an awful risk, but it may take that to get the market to look at IBM as a grow company again.
And, if IBM moves forward, why no HP(NYSE: HPQ), Yahoo! (NASDAQ: YHOO) or Cisco (NASDAQ: CSCO)? There could be no end to it.
Douglas A. McIntyre
For more market insight go to http://www.247wallst.com/
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