International Business Machines Corp. (IBM) began cutting U.S. jobs today as part of a plan announced in April to spend US$1 billion globally to trim its workforce, according to a person familiar with the move.

The reduction will target employees with a range of seniority, from rank-and-file workers to executives, said the person, who asked not to be named because the information is private. Some U.S. employees began to receive notifications of the cuts last night, according to Lee Conrad, a coordinator for AllianceIBM, an employee group.

IBM, the world’s largest provider of computer services, announced the job-cutting effort after releasing disappointing first-quarter results in April. The Armonk, New York-based company posted profit of US$3 a share in the period, missing the US$3.05 predicted by analysts.

It was the first earnings shortfall since 2005, according to data compiled by Bloomberg. IBM said at the time that the job reduction would be concentrated overseas.

The company is probably cutting 6,000 to 8,000 jobs globally, based on the US$1 billion cost figure, said Laurence Balter, an analyst at Oracle Investment Research in Fox Island, Washington. That would represent less than 2 per cent of IBM’s total workforce of 434,246 as of Dec. 31.

“Change is constant in the technology industry and transformation is an essential feature of our business model,” IBM said today in a statement, without giving specifics on the job cuts. “Consequently, some level of workforce remix is a constant requirement for our business. Given the competitive nature of our industry, we do not publicly discuss the details of staffing plans.”
 

BLOOMBERG