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IBM ANNOUNCES CAPACITY REDUCTIONS, ADOPTION OF FINANCIAL ACCOUNTING STANDARD 109, WORK FORCE UPDATE

IBM ANNOUNCES CAPACITY REDUCTIONS, ADOPTION OF FINANCIAL ACCOUNTING
 STANDARD 109, WORK FORCE UPDATE
 ARMONK, N.Y., Sept. 29 /PRNewswire/ -- IBM today announced worldwide capacity reductions to further streamline the company and improve competitiveness. IBM also announced that its global work force reduction actions continue to exceed expectations.
 The capacity-reduction actions are focused primarily on physical assets, such as equipment and buildings, and not on employee reductions. Some employee relocations will be involved. IBM also said it would reduce the amount of software on its balance sheet.
 IBM Chairman John F. Akers said, "Our business units have been carefully evaluating their capacity requirements within an industry environment marked by rapid changes in technology, shifting marketplace demand, and prolonged worldwide economic weakness. With this announcement, IBM will achieve an improved balance between assets and current business needs."
 IBM said the cost of the actions will be approximately $2.1 billion on an after-tax basis. At the same time, IBM announced that it has adopted Financial Accounting Standard 109 (see note), which will allow the company to recognize about $1.9 billion in deferred tax assets. The capacity-reduction charge and the FAS 109 accounting change, in combination, largely offset each other and essentially do not involve the use of cash.
 The company also said it expects to reduce its worldwide work force by about 40,000 employees this year, an increase of about 20,000 over its original estimate. The total cost of additional 1992 employee departures, plus some employees who will be leaving by early 1993, will be approximately $2.1 billion, which will be charged against 1992 earnings. By year-end 1992, IBM will have reduced its worldwide work force by approximately 25 percent since 1985.
 The capacity reductions will provide significant long-term benefits to IBM's business units and to the IBM Corporation. IBM's units will benefit by improved operating efficiencies and productivity gains resulting from leaner, more streamlined worldwide manufacturing and development processes. The IBM Corporation will benefit by being better positioned to achieve its long-term financial goals. Including the capacity-reduction actions announced today, IBM will have reduced its total manufacturing space by approximately 40 percent since 1985.
 IBM estimated that its ongoing cost and expense structure will be reduced by about $4 billion annually beginning in 1993 as a result of today's capacity reductions and restructuring actions that were initiated in the fourth quarter of 1991.
 /Note: Financial Accounting Standard 109, "Accounting for Income Taxes."/
 -0- 9/29/92
 /CONTACT: Rob Wilson of IBM, 914-765-6565/
 (IBM) CO: IBM Corporation ST: New York IN: CPR SU: RCN


KD -- NY077 -- 4528 09/29/92 16:27 EDT
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Date:Sep 29, 1992
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