updated 5/5/2005 7:43:42 AM ET 2005-05-05T11:43:42

International Business Machines Corp. is restructuring its operations to make them leaner and nimbler, slashing between 10,000 and 13,000 jobs, mostly in Europe, and taking a second quarter charge in the process.

The majority of the cuts announced Wednesday are planned for Europe, where the company began eliminating jobs even before it announced its disappointing first-quarter earnings last month. In March, IBM laid off 500 Swedish workers, 9 percent of its work force there, and shut down most operations in five cities.

IBM spokesman Fred McNeese said Thursday that all major European countries will be involved in the restructuring, while some smaller countries will not suffer any reductions. He added that most of the cuts will involve workers voluntarily leaving their job.

“The reductions will not be focused on any one particular country,” McNeese said.

The cuts, which will affect between 3 and 4 percent of IBM’s 329,000-person work force, are in line with analysts’ predictions.

The company said Wednesday that the pretax charge will amount to between $1.3 billion and $1.7 billion.

IBM surprised investors in April when it missed first-quarter earnings estimates by 5 cents a share. Chief Financial Officer Mark Loughridge said during the earnings conference call that the company planned a “sizable restructuring.”

“European sales seemed particularly disrupted as rumors flared in the final weeks of the quarter,” Goldman Sachs Group Inc. analyst Laura Conigliaro wrote in a report last month.

IBM said it will run fewer services offices worldwide and it will reduce European managers.

“As a result, IBM will create a number of smaller, more flexible local operating units in Europe to increase direct client contact,” the company said.

IBM said it will realign operations in Europe to reduce bureaucracy in lower-growth countries. Sales in France, Germany, Italy and Japan, which account for one-quarter of the company’s revenue, were down 5 percent in the first quarter.

IBM stock closed Wednesday at $77.08 a share on the New York Stock Exchange, up 61 cents. In after-hours trading, the stock was up 67 cents, to $77.75 a share.

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