IBM to Slash 5,000 Services Jobs in United States

IBM will cut about 5,000 jobs in the United States, adding to similarly large cuts in the past few months, sources with knowledge of the matter told Reuters Wednesday.

Aaron Brown: Photography

The job cuts will account for over 4 percent of IBM's U.S. workforce, which totaled around 115,000 at the end of 2008. The sources, who were not authorized to speak publicly on the issue, said the cuts will mostly be in IBM's global services business, which includes outsourcing and consulting services.

A spokesman declined to comment. The company, which had a total workforce of 398,455 as of end 2008, has not disclosed how many jobs it has cut so far this year, but has said it was making "structural changes'' to reduce spending and improve productivity.

IBM , which now earns around two-thirds of its revenue from outside the United States, has been expanding its workforce in emerging markets like India and China.

At the end of 2009, employment in the BRIC countries—Brazil, Russia, India and China—totaled around 113,000.

IBM has been hit by slower U.S. technology spending, although it has fared better than many rivals thanks to its global footprint and a decreased emphasis on hardware sales.

A month ago, IBM affirmed its full-year forecast of $9.20 earnings per share, and said contract signings for its business services had grown so far this year.

Wednesday's news also comes as IBM is in exclusive talks to buy Sun Microsystems , according to sources familiar with the matter, a move that would create a clear leader in the high-end computer server market.

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