IBM Australia has dismissed as "rumour and speculation" reports 4,000 positions worldwide are under threat from the integration of PWC Consulting with IBM's Business Innovation Services consulting arm.
An IBM Australia spokeswoman told ZDNet Australia the Wall Street Journal Online report was based on "rumour and speculation" and declined to comment further.
The Wall Street Journal Online, citing people familiar with IBM's plans, reported the company was still determining how many positions would be cut from PWC Consulting's 30,000-strong workforce or Business Innovation Services' 50,000-strong headcount.
An IBM spokeswoman in London also declined to comment on the report, saying it was premature to discuss the future structure of the unit as the acquisition awaits final approval.
The deal is scheduled to be completed on about 30 September and the layoffs, which would amount to about 5 percent of the combined units, are expected during the fourth quarter, according to the Journal.
The tough current climate for IT consulting services is affecting most firms in the sector. Analysts say global demand for IT services is still declining, with an upturn not expected until the second half of 2003 at the earliest.
"It wouldn't surprise me to see them take out head count to address this," a technology analyst in London told Reuters. However, local analysts have told ZDNet Australia they did not expect a major reduction in headcount either globally or locally as a result of the deal.
Last month, IBM announced an agreement to acquire the consulting business for $3.5bn (£2.25bn) in cash and stock.
Many of the layoffs are expected to be in the support-staff area, with IBM planning to retain people with direct client contacts, the Journal reported.
The people familiar with IBM's plans said the layoffs are still being fine-tuned and could change if the information-technology consulting business rebounds unexpectedly or if it continues to get worse, according to the Journal.
Layoffs could also be reduced by people leaving Pricewaterhouse before the acquisition occurs, the Journal reported. They said individuals to be laid off have not yet been identified.
Business Innovation Services is one of three services portfolios run by IBM under the IBM Global Services banner, the others being integrated technology services and strategic outsourcing. Business Innovation Services looks after e-business consulting, business transformation and business consulting. Under the acquisition terms, PwC Consulting will become part of the Business Innovation Services unit.
