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.