IBM 'flatly denies' reports of 100,000 job losses
IBM has denied reports that it is poised to lay off 26 per cent of its workers, or 100,000 people.
The multinational technology and consulting corporation has dismissed an article published by Forbes last week as "ridiculous" and "baseless"
IBM spokesman Ian Colley told the Associated Press in a phone interview that the company "flatly denies" the report, which was written by a contributor for Forbes.com
In the article the author referred to the rumoured lay-offs as "Project Chrome, the code name for what has been touted to me as the biggest reorganization in IBM history".
He went on: "Project Chrome is finally upon us, triggered I suppose by this week's announcement of an 11th consecutive quarter of declining revenue for IBM. Project Chrome is bad news, not good. Customers and employees alike should expect the worst."
But in a statement IBM said it has previously announced layoffs affecting "several thousand people," only "a small fraction" of the number predicted.
The company called the speculation "stupid" and "ridiculous" and added that IBM "still makes huge profit".
And while that's good news for employees, investors appeared to have welcomed the idea of big changes at Big Blue. Between Thursday, when the report was posted online, and Monday morning's denial, IBM shares rose about 4 per cent to peak at $159.46. The stock closed up just 49 cents at $156.36.
Investors may be looking for IBM to make some significant changes, Morningstar stock analyst Peter Wahlstrom told the Associated Press, although he added that 100,000 job cuts is more than he would expect. Wahlstrom said these kinds of rumours come up periodically, though they get "snuffed out pretty quickly" if there's no weight to them.
Such a huge layoff would be disruptive and "inconsistent" with IBM's recent statements, Bernstein Research analyst AM Sacconaghi said in a note to investors. But, "ironically, given the stock's increase over the last couple trading days, we also see the potential for disappointment if a meaningful workforce action is not announced in the near-term".
Responding to the denial on Monday the author of the Forbes report conceded that IBM "doesn't like me". However, he stuck to his guns, writing: "Like my young sons who never hit each other but instead push, slap, graze, or brush, I think IBM is dissembling, fixating on the term 110,000 layoffs, which by the way I never used.
"Whatever the word, what counts is how many fewer people will be paid by IBM on 1 March compared to today."
IBM is confronting a sales slump as it struggles to adapt to big changes in the way businesses buy software and other commercial technology. It issued another disappointing earnings report last week, as both revenue and profit fell in the December quarter. Chief executive Virginia Rometty says she's working to refocus the Armonk, New York, company on new tech markets, including data analytics, artificial intelligence and cloud computing. Its planned layoffs are aimed making cuts in some areas to then hire about 15,000 workers with new skills. As of the end of 2013, IBM had 431, 212 workers.