IBM to begin furloughs this month

IBM Corp. is putting employees in its hardware sector on weeklong furloughs beginning late August.

The world’s largest computer-service company is cutting expenses to preserve its profit margins as sales of products such as servers continue to decline. Sales of storage devices and microelectronics decreased 12 percent in the second quarter earnings report last year compared to this year.

The direct effect of the furloughs on the Armonk-based IBM site is unknown. In the second quarter, the company spent $1 billion to restructure its workforce, including in Armonk, and expects to cut more than 3,300 jobs in the U.S. and Canada, said Alliance@IBM, an employee group.

Analysts say that IBM has fewer ways of handling its portfolio and has seen a decline in competitive position across its industries.

The company spent $3.6 billion on share repurchases last quarter and raised its forecast last month for 2013 profits to at least $16.90 a share, an increase from an estimated $16.70 before then.

IBM plans to use its semiconductor technology to revamp the hardware units. The company plans to partner with Google Inc., Nvidia Corp, and other technology companies to license its microprocessor designs, according to recent reports.