IBM Furloughs Employees of Hardware Group to Cut Costs

Monday, 05 Aug 2013 06:00 PM

 

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International Business Machines Corp., the world’s biggest computer-services company, said it’s requiring the majority of U.S. employees in its hardware division to take a week off with reduced pay.

U.S. hardware employees, including those involved in development and procurement, will take a furlough week with one-third pay starting either Aug. 24 or 31, said Jay Cadmus, a spokesman for the Systems and Technology Group. Executives in the division will take no pay during the week.

The company is cutting costs in its hardware group after demand for its servers continued to slow in the second quarter. Sales in the hardware business, which also includes storage devices and microelectronics, slid 12 percent in the period from a year earlier to $3.76 billion.

“We looked at a variety of things that we could do, and in lieu of other options considered this the best approach in the balance of the organization,” Cadmus said in a phone call. The company has done furloughs before, he said.

In the second quarter, IBM spent $1 billion to restructure its workforce, cutting thousands of employees.

© Copyright 2014 Bloomberg News. All rights reserved.

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