Rumor: IBM plans to cut 8,000 jobs in Germany


A new report coming out of Germany says that International Business Machines Corp. is planning to cut 8,000 jobs out of its 20,000-plus workforce in Germany, according to sources from the company's management.

Hours after IBM Corporation purchased smartphone and tablet application developer Worklight Ltd. for reportedly between $50 and $60 million, a news media outlet in Germany is reporting that the technology company is planning to lay off 20,000 workers.

According to Handselblatt, management sources say that IBM is working on its medium to long-term efforts to restructure its workforce. At the present time, IBM maintains a workforce of 20,000 in Germany – 427,000 worldwide.

“We constantly focus on innovation and competition. Transformation is part of our business model and our workforce adapts accordingly,” said Peter Gerdemann, a spokesman for IBM based in Ehningen, Germany. “Given the competitive nature of our business, we don't openly discuss the details of plans.”

Bert Stach, a representative of the labor union Ver.di, who is in negotiations with IBM, told Bloomberg News that he thinks the company will not conduct mass layoffs but rather offer severance packages to its employees.

“In Germany, if you’re doing mass layoffs you have to go through negotiations with unions, and I think IBM will do anything to avoid that.” He added that it’s pure speculation as to how many will lose their jobs.

Last month, IBM stated that its earnings will increase to at least $14.85 per share sometime this year. Virginia Rometty, IBM CEO, said the company is meeting its goals to reach the projected target of at least $20 per share in 2015.

This is part of a project called the Liquid Challenge Program, an aim to transform the company into a new and flexible organization that includes reducing production costs and finding the world’s best talent to design software applications from home.

Source: Digital Journal