(By Salman - iStockAnalyst Writer)Speculations are rife on the internet that IBM may soon announce a massive job cut as consumers and businesses cut back on technology spending amid deepening recession .
Alliance, an employee group at IBM, says that the Armonk, New York based technology company may come up with an announcement late in January. The company is expected to report its fourth quarter financial results on January 20.
A post on the organization’s website said the company is set to announce 16,000 job cuts or 4% of its global workforce on January 23. According to IBM's Web site, the company employs more than 386,000 people worldwide.
Lee Conrad, national coordinator of the Alliance stated “Generally they go in batches of a couple hundred here and a couple hundred there. IBM's been cutting people every couple of weeks, but they're small, silent cuts. Conrad added "What we're concerned about is a massive one."
According to unconfirmed reports, employees in the United States will be most affected by the pruning exercise. From the various messages on the website of Alliance, it appears that IBM's semiconductor plant in Burlington, VT, may be worst hard hit.
The company however refused to comment on the rumor. Fred McNeese spokesman of IBM said that company "does not comment on rumors and speculation." Another IBM spokesman Ian Colley said “We constantly rebalance our workforce and continue to invest in growth areas.”
On Monday, IBM officials confirmed that the company has let go of few contract employees. In May 2007, company reduced its headcount by 1,570 and followed it with a job cut of 450 in June. The company had axed 15,600 jobs in 2002, in the midst of dot com crash.
Earlier, rumors of job cuts at software giant Microsoft (NASDAQ: MSFT) surfaced when an anonymous employee claimed that the company may announce layoffs in January. However, the software maker has so far dismissed it as speculation.
Technology companies have been forced to resort to cost cutting measures amid declining corporate spending on computers, software and information technology.
Shares of IBM (NYSE: IBM) rose $3.27 or 3.81% to $90.13 in afternoon session on Tuesday.
Disclosure: Author does not own any of the stocks discussed here.
