IBM as struggled to make the move from manufacturing computers and microchips to cloud computing
IBM
is preparing to scrap 110,000 of its global 430,000 workforce in the
biggest corporate cull in the computer giant's history, a report has
revealed.
The
company will make the job cuts this week under a plan known internally
as 'project chrome', according to US technology blogger Robert Cringely
on Forbes website.
IBM
is in the process of layoffs, as disclosed in its latest earnings
report last week but said the number of job losses was significantly
fewer than had been claimed.
Writing for Forbes, Mr Cringely said: 'To fix its business problems and speed up its "transformation"...about 26 per cent of IBM's employees will be getting phone calls from their managers.
'A few hours later a package will appear on their doorsteps with all the paperwork. Project chrome will hit many of the worldwide services operations.'
He added: 'The USA will be hit hard, but so will other locations. IBM's contractors can expect regular furloughs in 2015.
'One in four IBMers reading this column will probably start looking for a new job next week. Those employees will all be gone by the end of February.'
IBM did not issue a categorical denial of the report, but suggested it was exaggerated.
A company spokesman said: 'IBM does not comment on rumors, even ridiculous or baseless ones.
'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 $600 million charge for workforce rebalancing.
'This equates to several thousand people, a small fraction of what's been reported.
'Last year, IBM hired 45,000 people, and the company currently has about 15,000 job openings around the world for new skills in growth areas such as cloud, analytics, security, and social and mobile technologies.
'This is evidence that IBM continues to remix its skills to match where we see the best opportunities in the marketplace.'
Last week, Ginni Rometty, chief executive since 2012 and who joined the company at 24 in 1981 as a systems engineer, reported quarterly profits below analysts' forecasts and an 11th straight quarter of falling revenues
IBM has struggled to make the move from manufacturing computers and microchips to the world of cloud computing.
Last week, Ginni Rometty, chief executive since 2012 and who joined the company at 24 in 1981 as a systems engineer, reported quarterly profits below analysts' forecasts and an 11th straight quarter of falling revenues.
Chief Financial Officer Martin Schroeter told investors IBM was taking restructuring charges of around $580 million, but did not specify the number of jobs affected.
'We are not going to replicate the same level of restructuring that we had last year. It will be a lower amount.'
Annual revenue at IBM fell to $93bn (£62bn) last year from $107bn three years earlier as the company shed businesses such as its unprofitable chip design and manufacturing arm.
It is still the world's largest computer technology company, but has so far failed to offset declining revenues from its old operations with new income from consulting, security software and analytics.
IBM: THE COMPANY BEHIND THE FLOPPY DISK AND FIRST MODERN ATM
The computer company was founded in 1911 and was a merger of four earlier companies.
When it started out, it focused on technological advances such as the computing scale (a weighing scale which gave the prices of the different items it weighed) and the time clock (which allowed workers to record the times they started and finished work each day).
IBM played a key role in Franklin D Roosevelt's Social Security Act of 1935, which included the issuing of social security numbers to 26 million American workers.
From the 1950s to the 1980s, it produced the first hard and floppy disks, the supermarket checkout and an early ATM. In 1981, it released its own personal computer, the IBM PC.
In 1990, the company was the second most profitable enterprise in the world and was believed to be set to benefit from the continued growth of the IT industry.
But the following year the company's earnings dropped as it outsourced its software and hardware and between 1991 and 1993 the company posted a $16billion loss. Hundreds of thousands of employees lost their jobs.
However, a new CEO Louis V Gerstner Jr, turned the fortunes of the company around during the 1990s, coinciding with the rise of the internet. It focused on business software and specialist microchip production. By 1994 the company was showing a $3 billion profit once more.
Gerstner retired in 2002, with the company once again one of the top computing firms in the world.
However, in recent years IBM has struggled to make the move from manufacturing computers and microchips to the world of cloud computing.
Last week it reported quarterly profits below analysts' forecasts and an 11th straight quarter of falling revenues.