IBM CEO Sam Palmisano has said that the company will continue to cut costs by up to $2 billion a year to deliver on long-term double-digit profit growth. But the CEO did not comment on growing rumours that the company is poised to make massive layoffs.
In his first analyst meeting since taking over from Lou Gerstner as CEO, Palmisano said IBM would address the issues impacting some of the firm's weaker businesses, including its loss-making personal computer division, and deal with them 'appropriately'.
'Clearly, there are parts of the business where we have to be more efficient,' he said, adding that investors will hear more about the company's plans in the near future.
'We are going to have to continue to drive out of IBM $1 to $2 billion in cost cuts - its the nature of the business, we have to do that.'
Last week, unions representing IBM workers publicly stated they were anticipating job cuts. Those rumours have ranged from 2.5% to 10% of IBM's 320,000 worldwide workforce. IBM has an Irish workforce of 4,100.
The company has seen sales fall amid the overall downturn in the corporate technology sector, also known as the information technology markets. IBM's microelectronics division, which includes personal computers and semiconductors, have borne the brunt of the slump.
But rather than concentrate on boosting sales, Palmisano said the company would focus on delivering strong profits. Turning to the prospects for the technology sector as a whole, Palmisano said IT remains a growth industry, and described the current downturn as a short-term phenomenon.
