3 September 2002 Systems and software giant IBM is expected to lay off 4,000 staff following its $3.5 billion (€3.53bn) acquisition of PwC Consulting, the consultancy division of PricewaterhouseCoopers (PwC) in July 2002, according to US press reports.
Citing sources at the company, the Wall Street Journal (WSJ) says IBM will carry out the job cuts in the fourth quarter, although it is unclear how many will come from PwC Consulting and how many from IBM’s Global Services division. The PwC Consulting purchase added 30,000 employees to IBM Global Services’ headcount of 150,000.
The transaction, which has not yet been completed, will help IBM Global Services – already the world’s largest services company – increase revenues to more than $40 billion (€40.4bn). IBM plans to complete the deal on 30 September 2002.
According to the WSJ, IT support staff are most at risk of losing their jobs, while IBM plans to retain staff with direct client contacts. At present, IBM executives are working with a transition team at PwC to determine where the skills of both companies overlap – and whose jobs will be cut.
However, an IBM spokesperson denied that it planned to cut 4,000 jobs and added, “The deal is still being approved by all of the various partners [at both companies]”. As a result of the slowdown in IT spending, IBM laid off more than 5% of its staff during 2002, reducing its workforce to 305,000.