IBM Laying Off Up to 1,000 in Its PC Group

IBM Corp. is cutting 5% to 10% of its personal computer group’s work force, or up to 1,000 employees, in an effort to cut losses at the unit.

The staff reduction will mostly hit marketing employees as the company consolidates its staff for different brands--including Aptiva PCs, ThinkPad laptops and Netfinity computer servers--under one marketing umbrella.

IBM notified employees Wednesday of the cuts, which will be completed by the end of the year. The firm, which employs 291,000 people overall, said an undetermined number of people will be laid off, though some affected employees will be offered jobs in other divisions.

IBM, which pioneered the personal computer industry in the early 1980s, lost about $150 million in the second quarter in the unit, which sells PCs to both consumers and businesses. The unit lost nearly $1 billion last year.

Fierce price wars have sharply reduced profits at major computer makers.

IBM, based in Armonk, N.Y., has been struggling to repair its so-called Personal Systems Group for several years, and some analysts have suggested that IBM should stop selling personal computers. Last summer, IBM replaced the head of its consumer PC division with Michael Braun, but Braun’s role is unclear now that IBM has folded the unit into the operation that sells PCs to businesses.

The company is making an aggressive effort to emphasize its faster-growing businesses, which include selling computer services to corporations and selling software.

IBM shares fell $2.88, or 2.5%, to close at $113.50 on the New York Stock Exchange.