SAN FRANCISCO (05/30/2000) - IBM Corp. is laying off just under 1,000 of its U.S. services staff, equivalent to 0.3 percent of its total workforce, in part due to the completion of projects related to the year 2000 (Y2K) problem, a company spokesman confirmed today.
"It's a very small percentage of our overall workforce," said IBM spokesman Scott Brooks, in a phone interview today. "We hope that more than half (of the laid-off staff) find jobs within IBM."
Big Blue expects to hire between 15,000 and 20,000 people for its services business this year, Brooks said. The company currently employs 138,000 staff globally in its services operation, 44.9 percent of IBM's total workforce of 307,000.
For the first quarter of fiscal 2000, IBM's worldwide services business pulled in revenue of US$7.6 billion, essentially flat when compared to the year-ago quarter. The vendor attributed the stagnation in revenue to two main factors -- corporates' Y2K concerns and the sell-off of IBM Global Network to AT&T Corp. last year. [See "IBM Tops Q1 Earnings Estimates," April 18.] For the full year of fiscal 1999, Big Blue's global services operation reported revenue of $33.2 billion.
Last week, IBM signed a $400 million,10-year outsourcing and technology services deal with New York-based insurance and financial services company AXA Financial Inc. [See "Financial Services Firm Taps IBM for Outsourcing," May 26.]This month, Big Blue has also signed 10-year deals each valued at $1.5 billion with French pharmaceuticals company Aventis SA and Houston-based energy startup The New Power Co. [See "Companies Sign $1.5B Outsourcing Deals with IBM," May 20.]IBM, based in Armonk, New York, can be reached at +1-914-499-1900 or via the Internet at http://www.ibm.com/.