We've known for months that Silicon Valley isn't safe. But Armonk, N.Y., home of International Business Machines (NYSE:IBM) -- that area has to be safe, right?
Wrong. On Sunday, an IBM spokesperson confirmed -- in an email to me -- that Big Blue laid off employees last week, joining Nokia (NYSE:NOK), Intel (NASDAQ:INTC), and Electronic Arts (NASDAQ:ERTS) as recent cutters. Quoting from the statement:
On Jan 21, we notified some employees to inform them their jobs were being eliminated. This is a North American action however we are not communicating locations affected or the number of jobs. IBM continuously evaluates its mix of skills and resources, throughout the year, and makes changes as needed.
News.com's Jennifer Guevin provided context to this circulating story in a weekend blog post. Citing various sources, she confirmed that at least 2,800 employees have received pink slips.
ZDNet Asia, meanwhile, is reporting that Big Blue could cut 2,600 jobs in the Asia-Pacific region. IBM didn't speak to that in its email to me but the move seems plausible; Big Blue recently turned away from Asia and toward East Lansing, Mich., and Dubuque, Iowa, for new service centers.
Yet if IBM is cutting staff, overseas peers may have it worse. Wipro (NYSE:WIT) offered a sober assessment for 2009 in reporting third-quarter earnings last week. The Wall Street Journal reports that Tata Consultancy is losing projects. And Satyam Computer Services' (NYSE:SAY) cooked books are poisoning investors.
Of India's top outsourcers, only Infosys (NASDAQ:INFY) has impressed investors as much as IBM has. And for good reason; both reported stellar results in recent weeks. Infosys topped the Street's earnings estimates by $0.03 per share, while IBM boosted its bottom line by 17%.
Performance like that may help to explain why -- layoffs or no layoffs -- very few in our 125,000-strong Motley Fool CAPS community are worried about IBM:
|
Metric | |
|---|---|
|
CAPS stars (5 max) |
**** |
|
Total ratings |
3,168 |
|
Percent Bulls |
89.3% |
|
Percent Bears |
10.7% |
Data current as of Jan. 26, 2009.
"This ain't your daddy's Big Blue. IBM has cut the dead weight and now they're lean and mean. This is how a bloated company with an outdated business model can turn itself around. GM could stand to learn a thing or two from them," wrote CAPS All-Star BSHumphreyII in December.
Agreed, but that's my take. I'm more interested to know what you think. Would you buy IBM at these prices? Let us know by signing up for CAPS today. It's 100% free to participate.
Get your clicks with related Foolishness:
- Big Blue isn't dead yet.
- It takes a special kind of tech stock to be a millionaire-maker.
- I'm counting on IBM to help make me rich.
