The “Yediot Ahronot” Hebrew daily reports that IBM Israel has begun cutbacks, which will include laying off 100 employees, mostly in its services division.
Informed sources in IBM Israel said yesterday that, in view of the crisis in the division, which is not profitable, a senior executive from IBM Italy had visited the company’s offices in Israel, in order to personally observe employee productivity.
Following the visit, IBM decided to close down some of its unprofitable activity, and focus on enterprise resource planning (ERP), cooperation with SAP (NYSE, LSE: SAP; XETRA: SAPG) in software solutions, and business intelligence (BI). These divisions are the most profitable ones in all computer companies.
Company sources said the measure was seasonal. An IBM spokesperson said, “The company does not comment on speculation and rumors.”
IBM Israel is currently competing jointly with Matrix IT (TASE: MTRX) against EDS Israel and Ness Technologies (Nasdaq: NSTC) in a $100 million, seven-year tender to provide outsourcing computers services to a bank.
Published by Globes [online], Israel business news - www.globes.co.il - on March 21, 2005