Company News: IBM lays off another 1,500; Motorola to idle 4,000
IBM Corp. laid off 1,570 people Wednesday, primarily from an ongoing overhaul of operations in its giant technology services unit.
The Armonk, N.Y.-based company carried out a similar level of job cuts at the beginning of the month, for a total of 3,023 in this quarter and 3,720 for the year, according to IBM spokesman Edward Barbini.
That amounts to roughly 1 percent of the company, which employed 355,000 people at the beginning of the year. But even these small numbers reflect a big project inside IBM to transform its business.
Services is IBM’s biggest division by revenue, but the advent of lower-cost competition overseas has forced IBM to work harder to improve the unit’s profit margins. In the first quarter, pretax income for IBM’s tech services fell 19 percent, even as revenue rose 7 percent.
Wednesday’s job cuts were largely part of the company’s response. Although IBM did not disclose where the layoffs were being made, the company had blamed the first-quarter profit shortfall on problems in its U.S. outsourcing business.
“Cell phone maker Motorola Inc. said Wednesday it will cut another 4,000 jobs as part of a plan aimed at improving sagging financial and operational results.
The company already is in the process of eliminating 3,500 jobs as part of a two-year cost-cutting plan to save $400 million. Those layoffs, announced in January, are to be completed by June 30, it said.
Motorola said it will save another $600 million in 2008 by cutting 4,000 more workers, prioritizing investments and putting controls on discretionary spending and general and administrative expenses.
“EBay Inc. announced Wednesday that it acquired StumbleUpon Inc., a software startup that suggests Web sites based on reader reviews and personal preferences of its members.
The $75 million cash acquisition gives eBay access to about 2.3 million people who have filled out profiles at StumbleUpon, founded in 2001 by three Canadian software engineers in Calgary. The venture capital-funded company, which recently relocated to San Francisco, is considered a pioneer of the so-called “Web 3.0” niche.
The term refers to technology that pairs general Internet search capability with a user’s personal data and aggregated community data, theoretically delivering more relevant results than a standard search engine such as Google Inc.