IBM Cuts Workers' Hours to Save Money
International Business Machines Corp. (NYSE: IBM) has ordered staffing contractor CDI Corp. (NYSE: CDI) to reduce the number of hours CDI's employees bill Big Blue to no more than 36 a week. The cut was announced in a memo obtained by Bloomberg News and cites "challenging economic conditions" as the reason for the move.
Last week, IBM reported its first quarterly earnings miss in eight years, and the company said at the time that it would spend $1 billion cutting jobs among its workforce as a way to reduce expenses. The memo to CDI claims that IBM's reduction in hours is intended to "retain as many CDI resources as possible for future work."
Neither IBM nor CDI responded to requests for comment on the memo. At this time, the reduction in hours only applies to the second quarter of 2013. CDI employees make be exempted from the 36-hour rule upon written authorization from IBM management.
Shares of CDI are down more than 6% at $13.82 after posting a new 52-week low of $13.58 earlier today. The stock's 52-week high is $18.23.
IBM's shares are up about 0.8% at $201.12 in a 52-week range of $181.85 to $215.90.
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