Tech giant IBM silent on Middle East redundancies

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IBM, the world’s largest computer-services provider, has refused to reveal how many staff in the Middle East will lose their jobs as part of its $1bn plan to cut its global workforce by up to 8,000, with the bulk of redundancies taking place outside the US.

Having operated in the Middle East since 1947, IBM announced in April it was planning to spend $1bn as part of its “workforce rebalancing”, with most staff cuts planned for its operations outside the US.

"Last year, we had about $800m workplace rebalancing charges spread across the year and this year we expect the workforce rebalancing charges to be closer to a billion and concentrated in the second quarter,” IBM chief financial officer Mark Loughridge said in April. "We expect the bulk of that charge to be outside the US.”

So far, 2,792 employees have been made redundant, according to Alliance@IBM, the organisation representing IBM employees.

Analysts, such as Laurence Balter from Oracle Investment Research in Washington, predicted staff cuts could be as high as up to 8,000, or around two percent of IBM’s global workforce of 434,246.

IBM Middle East, which has its headquarters in Dubai, refused to reveal how many staff at its operations in the region would be made redundant as part of the global cost cutting process.

“Given the competitive nature of our industry, we do not publicly discuss the details of staffing plans,” a spokesperson told Arabian Business.

In April, IBM posted a rare quarterly earnings miss, as the technology services company struggled with the depreciation of the Japanese yen and a poor performance by its sales force.

"Their revenue has been declining for basically many quarters in a row. You can't have revenue declines and consistently expect your earnings to beat. That is catching up with them," said ISI Group analyst Brian Marshall.

Loughridge said IBM was "clearly not immune from changes in the global economy." IBM's first quarter revenue dropped 5 percent to $23.4bn, compared with estimates of $24.6bn. Revenues fell 3 percent adjusted for currency.

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