The majority of the overall workforce reductions are planned for Europe and IBM (Armonk, N.Y.) has initiated discussions of these changes with local consultation bodies. IBM reportedly employs about 100,000 workers in Europe.

The company also plans to realign its operations in Europe. It will create a number of smaller, more flexible local operating units in Europe to increase direct client contact.

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 cutbacks are "designed to improve the company's efficiencies, strengthen its client-facing operations and capture opportunities in high-growth markets," according to the company. "These actions will also allow IBM to shift resources to higher-growth markets and opportunities."

It's been a tumultuous time for IBM, especially in Europe Last month, IBM workers in Europe said they may strike over what they say is the company's ongoing movement of jobs to low-cost countries such as India and China, according to union sources. Meanwhile, a U.S. employee group is asking IBM stock owners to vote on an anti-offshoring resolution.

IBM, in fact, has been in a cost-cutting mode amid lackluster results in its recent quarter. The company has also been moving towards a service business model, prompting dramatic changes at Big Blue.

On the cost-cutting front, the computer giant is seeking to sell or lease almost 1 million square feet of a semiconductor research and manufacturing plant in East Fishkill, N.Y., according to an unpublished report.

By: DocMemory
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