IBM, which recently agreed to acquire the consulting segment of PricewaterhouseCoopers (PwC) for $3.5 billion, has indicated plans to cut as many as 4,000 employees, according to a report this week in The Wall Street Journal.
Both companies have endured sizable layoffs already this year, with IBM cutting over 15,000 or about 5% of its workforce during the second quarter and PwC Consulting cutting 2,400 jobs in the nine months prior to March 31, 2002. The exact number of layoffs has not yet been determined and may be affected by either an increase or a decrease in the global demand for IT services.
Analysts speculate that the cuts will come primarily from the PwC Consulting side of the combined company with the heaviest cuts expected in the support staff area. IBM plans to retain people who have direct client contacts and has indicated that consultants from both companies who are servicing the same clients will not necessarily be cut. "Where, for example, IBM and PwC Consulting people are servicing the same clients, the teams that are working to deliver different solutions through separate contracts, for the most part those teams are not going to change," said Maureen Rourke, global services spokesperson for IBM Canada. "Beyond that we are going to review and assess everything and see if there is any duplication between the two organizations."
The layoffs are expected to occur by December 31, 2002. To date, no specific layoff announcements have been made.