IBM shares fall 11% as firm says it will cut 25,000 jobs and may trim dividend; pretax charge of $6 billion expected in 4th period; mainframe woes mount

Article Abstract:

IBM, in the midst of its worst-ever crisis, watches its stock plunge nearly 11 percent, announces its first layoffs since 1940 and warns that it may cut its dividend. IBM Chmn John F. Akers says the company will take a $6 billion pretax charge for 4th qtr 1992 to pay for the costs of reducing its payroll by 25,000 workers and getting rid of assets of its struggling mainframe business. Akers warns that there are no signs of improvement for early 1993. IBM's stock falls $6.75 to $56.125 on very heavy New York Stock Exchange composite trading on Dec 15, 1992, after the news is announced. Akers, saying the firm's 'precipitous' decline caught executives off-guard, warns that the firm's $4.84 annual dividend may be slashed. He predicts mainframe revenue will drop 10 percent in 1992 and continue its descent in 1993. IBM plans to reduce 1993's research budget by $1 billion and slash its administrative costs by another $1 billion.

Prepackaged software, Dividends, Layoffs, Layoff, Stock, Market Value

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IBM net fell 75% in quarter on a big charge; disappointing year ended with net 35% off; firm vague on 1990 outlook

Article Abstract:

IBM announces 4th qtr 1989 profits fell 75 percent and FY 1989 profits are down 35 percent, leaving analysts uncertain about the company's outlook for 1990. The 4th qtr results reflect the $2.42 billion charge the company took in the wake of its decision to consolidate operations and cut its work force by 10,000 in 1990. FY 1989 earnings fall to $3.76 billion from 1988's $5.81 billion figure. The news causes IBM stock to fall $1.25 a share, closing at $98.875. Analysts say the report comes as no surprise and feel the real challenge will be the company's ability to control costs in 1990. Most are cautiously optimistic, saying IBM's 3090 line of mainframes and its PS/2 microcomputer are both doing well, while new products such as its yet-to-be-announced workstation line and its new mainframe disk drives should provide a shot in the arm.

Profits, Outlook, Profit, Fourth Quarter

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IBM announces big write-off, restructuring; staff to shrink by 10,000; $2.3 billion charge tops forecasts; buy-back set

Article Abstract:

IBM announces a restructuring and cost control plan that will cut 10,000 jobs and produce a $2.3 billion charge against pretax 4th qtr 1989 earnings. IBM's board also approves a plan to buy back $4 billion of its shares. IBM Chmn John Akers says the job cuts will be through attrition and incentives, including two weeks pay for every year of service, and will involve not layoffs or plant closings. The size of the writeoff surprises industry analysts and includes $1.3 billion to consolidate manufacturing plants and $500 million to reflect an accounting change in some of IBM's software investments.

Business planning, Cost control, Cost Reduction, Organization Structure, Reorganization

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