Business & Finance

IBM's chief hinted at an unspecified number of layoffs likely as the world's leading computermaker seeks to cut costs by as much as $2 billion. At a meeting with financial analysts in New York Wednesday, Sam Palmisano agreed with a questioner that a 6 percent reduction in the workforce – or 20,000 workers – "is absolutely appropriate" in response to a 6 percent drop in quarterly earnings. But he noted that IBM could lose 15,000 employees through attrition alone.

WorldCom, the second-largest US long-distance and data services provider, said it was tapping a $2.65 billion line of unsecured bank credit. The move turns up pressure on banks to approve a $5 billion secured loan that the company wants to help allay investor worries about its ability to meet debt repayments next year.

Bankrupt Kmart Corp. reported a $2.42 billion loss for fiscal year 2001 – an almost tenfold increase from 2000 – and restated earnings for the first three quarters after an internal investigation of accounts. The revelations came in the Troy, Mich.-based discount retailer's annual filing with the Securities and Exchange Commission Wednesday. Kmart, which filed for bankruptcy in January, said it would have a recovery plan ready later this year.

Adelphia Communications Corp. announced that its founder had quit as chairman and chief executive. John Rigas's departure came amid concerns that Coudersport, Pa.-based Adelphia, the US's sixth-largest cable operator, may go bankrupt. Its accounting practices are the subject of a federal inquiry.

Employers reached a deal with the largest industrial union in Germany on a new contract that will pay workers 4 percent more over the next 12 months and 3.1 percent beginning June 1, 2003. The agreement between IG Metall and a federation of major companies applies to the heavily industrial state of Baden-Württemberg but is expected to be adopted nationwide as well. IG Metall members began a series of rolling strikes May 6 after contract talks collapsed. The union originally demanded a 6.5 percent hike.

Fiat, the largest industrial group in Italy, said it will cut 2,880 jobs, mostly in its struggling automotive division. Fiat lost almost $482 million in the year's first quarter.

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