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IBM job cuts heading to 16,000 in 2009, says Alliance@IBM

IBM employee group Alliance@IBM says more than 180 jobs have been cut in the latest round of lay-offs.

"We know other cuts are going on and employees are losing their jobs to offshored locations, but we do not have the numbers and IBM is staying in secret mode," Lee Conrad, Alliance@IBM national co-ordinator told Computer Weekly.

An IBM spokesman said that the company is "constantly managing resources as client demands evolve across a base of nearly 40,000 employees," according to reports.

Alliance@IBM fears that the number of jobs to be cut this year could reach 16,000, as predicted in January.

The organisation estimates that around 10,000 jobs have been cut so far this year as IBM moves forward with plans to cut costs, including moving jobs offshore to less expensive locations.

The employee organisation has criticised IBM for taking jobs away from the US, but analysts said the strategy will help IBM win overseas contracts and maintain healthy profits in its services business.

The strategy will also lower labour costs and enable IBM to compete more easily with Indian outsourcing companies.

In July, IBM reported strong second quarter financial results and raised its 2009 earnings forecast by just over 5% to $9.70 a share.

IBM is well on its way to achieving the $3bn cost cutting target set in March, with around $1.5bn in expenses slashed so far.


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