by Burke Speaker | January 22, 2014 9:04 am
Faced with poor fourth-quarter earnings and a poor overall year for IBM stock, IBM (IBM) is laying off thousands of workers and will take an estimated $1 billion in charges from the reorganization.
IBM reported poor Q4 results on Tuesday — with investors wringing their hands over a 26% slump in hardware revenue and a slight decline in services revenue.
IBM shares dropped 2.9% to $182.95 in after-hours trading.
From USA Today:
IBM typically re-balances its giant workforce every year, but the job cuts in 2013 and the reductions coming in 2014 are a bit bigger than in the past because the company has been struggling with weak revenue growth, the analyst explained.
It costs IBM about $70,000 to lay an employee off, so if the latest re-organization is mostly related to staff reductions, that suggests the company may be cutting 10,000 to 15,000 workers, Sacconaghi estimated. IBM has about 400,000 employees in total in more than 170 countries.
IBM stated that most of the job cuts would come from its hardware division.
This year, IBM is looking to expand its China customer base in China, though its revenue from the Asia-Pacific region has decreased by about 16%.
Martin Schroeter, the company’s chief financial officer who stepped into the role Jan. 1, said that the incurred costs of the layoffs on the company would be about the same as last year’s curts.
IBM’s layoffs in spring of 2013 cost IBM about $1 billion.
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