IBM To Reorganize Chip Unit, Take Up To $2.5 Billion Charge

IBM

In a statement released after the stock market's close, IBM said it is taking the steps "to improve further the company's competitive and strategic position in the changing information technology industry."

The realignment in the Microelectronics unit is designed to hone operational efficiencies and sharpen the company's focus on growth areas, IBM reported. The company said it plans to devote more attention to its copper-based technology for processors and close its older, aluminum-based chip operations.

Earlier on Tuesday, IBM said it plans to divest its Hard Disk Drive (HDD) unit by spinning it off--along with its 18,000 employees--into an independent company whose majority owner would be Hitachi.

IBM CFO John Joyce and other company executives are scheduled to explain the moves in greater detail during a late-day conference call with press and analysts. IBM shares rose $1.20 on the New York Stock Exchange Tuesday, closing at $79.31.