IBM Plans Restructuring Actions to Accelerate G...

IBM
                  

IBM today announced it plans to implement a series of restructuring actions
designed to improve the company's efficiencies, strengthen its client-facing
operations and capture opportunities in high-growth markets.

The actions will accelerate progress toward more globally integrated operations,
while addressing profitability in slower-growth regions, primarily in Europe.
These actions will also allow IBM to shift resources to higher-growth markets
and opportunities such as Business Performance Transformation Services.

As a result, IBM estimates that it will record a pre-tax charge of between $1.3
billion and $1.7 billion in the second quarter. The company expects to realize
benefits starting in the second half of the year.

The company plans to realign its operations and organizational structure in
Europe to improve the speed of execution and better meet the needs of its
clients. The success of this strategy will depend on reducing bureaucracy and
infrastructure in lower-growth countries and creating teams that can work across
country borders, shifting more employees into direct client roles that support
the company's plans to deliver higher-value services and products. This
eliminates the need for a traditional pan-European management layer to
coordinate activity. As a result, IBM will create a number of smaller, more
flexible local operating units in Europe to increase direct client contact.

On a worldwide basis, IBM plans to improve the efficiency of its services
operations by consolidating much of the service delivery workload into fewer
locations by using standard job roles, processes and tools.

IBM's restructuring actions include voluntary and involuntary workforce
reductions of between 10,000 and 13,000 employees worldwide. The majority of the
overall workforce reductions are planned for Europe, and the company has
initiated discussions of these changes with local consultation bodies.

Additional details about the actions will be provided during a conference call
and Webcast hosted by IBM Senior Vice President and Chief Financial Officer,
Mark Loughridge, on Thursday, May 5, beginning at 8 a.m. EDT. Investors and
press may view the Webcast at http://www.ibm.com/investor/events/ir0505/.
Replays will be available shortly after the original Webcast.

    CONTACT: IBM
             Edward Barbini, 914/499-6565
             [e-mail]