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IBM Europe Cutting Nearly 10,000 Jobs; Four Plants Under The Gun

April 1, 1993

Undated (AP) _ PARIS (AP) - IBM Europe has begun cutting nearly 10,000 jobs and told four plants in Britain, France, Spain and Sweden to trim their losses over the next 12 months, the European unit of the computer company said today.

They are among measures by U.S.-based International Business Machines Corp. to streamline operations after losing about $5 billion worldwide last year. The company has begun similar employee cuts in the United States.

Among IBM’s 11 plants in six European countries, 2,600 jobs - about 10 percent of the total factory work force - are to be eliminated in 1993, said spokesman Alan Gillings.

He said 7,000 other positions in marketing and service are also to be cut this year from IBM Europe’s work force, which totaled 90,000 at the end of 1992.

″We have have begun cutting the jobs, but it’s mostly severance packages, and all voluntary so far,″ Gillings said in a telephone interview.

The planned reductions were first announced in December as part of 25,000 worldwide in 1993, Gillings said. No figures were available on exactly how many jobs have been cut in Europe since then.

Four European factories must improve operations over the next year, especially by selling their products not only within IBM but also to other clients, said Gillings.

″It’s a question of overcapacity,″ he said. ″There are going to be reviews of their progress in September and December.″

Failing to meet expectations ″doesn’t necessarily mean closure,″ Gillings said. ″There’s a range of possibilities,″ he said, and scaling down ″could be one of them.″

The plants employ 4,800 people altogether, are located in Havant, Britain, Montpellier, France, Valencia, Spain, and Jarfalla, Sweden.

Montpellier, with 2,400 workers, is the main European factory building large computers. Renato Riverso, president of IBM Europe, was quoted as saying 500 jobs could be eliminated there within 2 years.

The plant in Jarfalla specializes in printers, Valencia in medium-sized computers and Havant in disc storage and telecommunications products, Gillings said.

Gillings quoted Riverso as saying IBM Europe entered first quarter 1993 expecting a ″slight decline″ in revenue, and that actual results ″may be a little bit better″ than expected.

Gillings said IBM Europe lost $1.73 billion last year.

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