NZ job losses likely from IBM-PwC merger: Gartner

Job cuts are expected in New Zealand following the July merger between IBM and PwC Consulting, says Gartner New Zealand analyst Michele Caminos.

Job cuts are expected in New Zealand following the July merger between IBM and PwC Consulting, says Gartner New Zealand analyst Michele Caminos.

A Wall Street Journal report last week said 4000 people would be affected in total of the 150,000 employed by IBM Global Services and 30,000 employed by PwC Consulting. But the US report, quoting people familiar with company plans, was unable to say how many redundancies would come from each company.

IBM New Zealand spokesman Jeremy Seed declined to comment on the report, dismissing it as “rumour”. PwC Consulting, which employs 25 IT staff in New Zealand, said it couldn’t comment due to EC rules.

Gartner New Zealand analyst Michele Caminos says some job losses can be expected as the natural result of a merger eliminating duplicate posts. She expects staff to go in administration and back office roles rather than in customer-facing positions. But it is too early to speculate when and where the axe may fall, Caminos says.

IDC Auckland analyst Mike Cranna expects local job losses would be “derisory, a handful, if any”.

He says IBM is doing “quite well at the moment”, picking up work with the Police and other contracts in a strengthening ERP market.

Earlier this year, IBM New Zealand, which employs 900, escaped other global redundancy rounds because of improving business.

IBM bought PwC for $US3.5 billion in cash and stock on July 30. IDC estimates IBM New Zealand’s services revenue at $160 million in 2001 and PwC Consulting at $40 million, giving the combined company some 10% of the New Zealand market.

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