Tyler Durden: In recent weeks, the stock of International Business Machines Corp. (NYSE:IBM) has staged a dramatic rebound surging from a February 11 low of $118 to $150 today, on what we previously assumed had to be another long-overdue bout of stock buybacks.
However, for that to make sense, the company – already at risk of being downgraded if it did not take further cost-cutting measures to offset the additional debt interest expense – would need to engage in another round of mass layoffs.
This is precisely what happened moments ago when Germany press reported that Big Blue is cutting some 1000 jobs in Germany.
More details, Google translated from Morgenpost.
The IT group IBM apparently is planning massive job cuts in Germany. According to the trade union Verdi, the Group has informed on Wednesday about the planned reduction of nearly 1,000 jobs by March 2017th This was announced by Verdi in a newsletter. Primarily affects service segments. The group had invited the workers’ representatives to negotiations for a social plan and balance of interests. In Hannover, a region should be shut down with about 200 employees, said a Verdi representatives. The Hanover stay but generally preserved.
“IBM has informed the participation and invited to negotiations,” confirmed an IBM spokesman. A hiring freeze, it will not give: IBM will continue to hire employees with key skills. For years, the IT group struggling with a decline in sales. IBM is in a time-tag, to be replaced by new one when the old segments such as the sale of servers or infrastructure.
Nationwide 16,500 employees.
Trade unionists feared already last year the job losses in the IT group in Germany. At that time there was talk of 2,500 jobs over the next two years. With the new announcement is not yet clear that it will not come to a further job cuts, said the Verdi representatives. Nationwide, the US group most recently employed about 16,500 employees. 2009 there were still 21,100 employees. (Dpa)
So with one of the key staples of the new abnormal back, namely “bad news = good news”, we are happy to see that the other one, replacing employees for buybacks, never left.
This article is brought to you courtesy of Tyler Durden From Zero Hedge.