Bloomberg News

IBM Employee Headcount Falls in 2013 for First Time in a Decade

February 26, 2014

International Business Machines (IBM:US) Corp.’s employee count dropped for the first time in a decade as the world’s biggest computer-services company reined in costs to help meet profit goals.

IBM had 431,212 employees at the end of 2013, down 0.7 percent from a year earlier, according to a filing (IBM:US). The company spent $1 billion last year to restructure its workforce and plans to do the same this quarter.

IBM Tries to Adapt. Again.

IBM is aiming for $20 a share in adjusted earnings by 2015, up from $11.67 in 2010 -- a target made more difficult by seven straight quarters of falling revenue. To get there, Chief Executive Officer Ginni Rometty has fired and furloughed workers, sold assets, cut IBM’s tax rate and bought back shares.

The company has already begun eliminating positions this year in Europe, Asia and South America, according to Alliance@IBM, an employee group. Workers in the U.S. and Canada are expected to be notified about job cuts today, the group said.

Worldwide, this year’s job cuts could lead to the elimination of at least 13,000 employees, Toni Sacconaghi, an analyst at Sanford C. Bernstein & Co., said in a Feb. 3 report.

Doug Shelton, a spokesman at IBM, declined to comment on the timing or number of job cuts.

IBM agreed to keep high-technology jobs in New York’s Hudson Valley through 2016, increasing the number of positions it has pledged to retain by 750, New York Governor Andrew Cuomo said this week in a statement. That would restore the 697 workers fired last year in Dutchess County, where the Armonk, New York-based company had about 8,000 employees as of 2012, according to the county government.

Lenovo Deal

IBM had last recorded (IBM:US) a reduction in its total workforce in 2002, when it ended the year with 315,889 employees, down 1.2 percent.

As part of the shift in its focus to products like cloud services and data analytics, the company agreed in January to sell its low-end server division for $2.3 billion to Lenovo. IBM said it expects to send more than 7,000 workers to the Chinese computer maker in the transaction.

IBM rose less than 1 percent to $184.06 at the close in New York. The shares are little changed (IBM:US) since the start of Rometty’s tenure at the beginning of 2012, compared with a 47 percent gain for the Standard & Poor’s 500 Index.

To contact the reporter on this story: Alex Barinka in New York at abarinka2@bloomberg.net

To contact the editor responsible for this story: Sarah Rabil at srabil@bloomberg.net


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