IBM and Sapient add to job cut woes

Monday was another bad day for computer industry consultants as both IBM and Sapient announced layoffs.

IBM Global Services plans to lay off about 1000 US employees in its consulting and services business unit. Spokeswoman Jan Butler said: "This is not a voluntary programme. I think today is the day that some people are being notified, but it is something we do in the normal course of business. The purpose is to rebalance our skills."

Less than one per cent of the 150,000 jobs in IBM Global Services will be eliminated. Local managers looking to improve the balance of professional skills in their operations were making the job cuts.

According to Butler, workers whose jobs are being cut will have 30 days to find work within Big Blue or face termination with severance. "We will continue with our hiring programme and end the year with more people than we started," she said.

On the same day, online business consulting company Sapient said it plans to reduce costs by cutting 390 jobs, or about 14 per cent of its staff.

Sapient executives said the company expects savings of about $13m in the third quarter and $60m annually. It also expects to incur a restructuring charge of about $50m.

While Sapient said it will also exit the games development business, the company plans to increase its operations in India as part of an effort to boost efficiency.

Sapient will relocate approximately 60 of its experienced consultants to the New Delhi office and expand its hiring and recruitment efforts in the country.

Jerry Greenberg, Sapient's co-chairman and co-chief executive, said: "The challenges of the economic environment are obvious, but what might be missed is the long-term underlying shift in what clients expect and need from their business partners."