IBM doubles planned job cuts for year to 50,000: Further dollars 2bn charge expected this year

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The Independent Online
INTERNATIONAL Business Machines, which has shed 100,000 jobs and dollars 11.6bn ( pounds 7.7bn) in the past two years, will make another 50,000 employees redundant and take at least another dollars 2bn in charges before the year is out.

Industry officials confirmed a published report yesterday suggesting that IBM's new chief executive, Lou Gerstner, will double the 25,000 redundancies projected for this year, forcing the troubled computer giant to take a dollars 2bn charge when it reports second-quarter results at the end of the month.

Analysts were already expecting an operating loss of about dollars 200m for the quarter but thought IBM's losses for the year would not exceed dollars 300m, or about 50 cents a share.

With the one-off charge IBM's book value would fall below dollars 44 a share, and analysts expect Mr Gerstner to cut its dividend again to dollars 1 from the dollars 4.84 payout last year. IBM's shares fell dollars 1 to dollars 481 4 on the news, hovering just above a 52-week low.

Earlier this week IBM (UK) announced a radical shake-up in its sales and marketing operations in an attempt to turn the company around.

The company, which lost more than pounds 600m last year on sales of pounds 3.75bn, also warned that anyone not meeting performance targets would be sacked.

IBM in the UK is being divided into 30 businesses, each concerned with specific products or marketing to particular industries. The headquarters staff of 2,500, which encompasses services shared by different parts of IBM (UK), will be cut back to 100 people in a holding company.

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