IBM Expected to Reorganize, May Trim 20,000 More Jobs

International Business Machines Corp., continuing to search for ways to restore its sagging profitability, is expected to launch a reorganization and new round of job cutbacks after a senior management meeting early next month.

The beleaguered computer giant, which is eliminating 20,000 jobs this year through attrition and early retirement incentives, will restructure itself to give more authority to individual operating units, industry analysts said.

The streamlining could include the elimination of as many as 20,000 more jobs next year, according to a report in the Wall Street Journal. An IBM spokesman declined to comment on the report, but noted that the “effort to streamline the business is an ongoing process.”

Sam Albert, an industry analyst and former IBM executive, said 20,000 job cuts may sound like a large number, but that the cuts equal only about 6% of IBM’s huge work force.

“Even without handing out pink slips, they can increase the voluntary attrition rate to 5% or 6%” through incentive programs, Albert said. Unlike most other companies in the industry, IBM has maintained a no-layoff policy, though employees have been under increasing pressure to shape up or ship out.

A reduction of 20,000 would bring IBM’s employee total down to about 330,000 worldwide at the end of 1992 from about 373,000 at the start of this year and from 407,000 at IBM’s peak employment in 1986.