IBM slashes more than 10,000 jobs

IBM plans to cut between 10,000 and 13,000 positions worldwide and to reorganise its management structure.

The changes, which will mostly affect IBM's European operations, will result in a charge of between $1.3bn and $1.7bn in the second quarter of this year and "yield benefits" in the second half of the year, the company said.

The restructuring, a significant move for the firm, was expected following Big Blue's disappointing first-quarter 2005 earnings. Last month, IBM chief financial officer Mark Loughridge said the company would undergo a "sizable restructuring" to address weak areas, notably in Europe.

IBM said employee reductions will include both layoffs and voluntary departures. The majority of the cuts will be in Europe, where the company has initiated discussions with labour organisations.

The reorganisation involves the streamlining of management in Europe. IBM said it will eliminate its pan-European management layer to reduce internal bureaucracy.

The company said in a statement: "IBM will create a number of smaller, more flexible local operating units in Europe to increase direct client contact."

The plan also calls for IBM to move some of its European personnel who work in its IBM Global Services division and consolidate them in fewer locations worldwide.

Martin LaMonica writes for CNET News.com

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