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Management discussion
International Business Machines Corporation and Subsidiary Companies

Employees and related workforce

Yr.-to-Yr. Change
For the year ended December 31: 2007 2006 2005 2007-06 2006-05
IBM/wholly owned subsidiaries 386,558 355,766 329,373 8.7% 8.0%
Less-than-wholly owned subsidiaries 11,769 10,720 12,377 9.8 (13.4)
Complementary 28,642 28,063 24,595 2.1 14.1

In 2007, total employees at IBM and its wholly owned subsidiaries increased 30,792 compared with 2006. The U.S. remained the largest country, with 121,000 employees, down modestly versus 2006 due to the Printer divestiture, while resources increased in Asia Pacific, EMEA and Latin America. The company continues to invest in Global Services and Software through a combination of hiring and acquisitions. The company also continues to rebalance its workforce globally to improve its global reach and competitiveness and to reflect the changing geographic mix of its business.

The company has been adding resources aggressively in emerging markets, particularly in the BRIC countries—Brazil, Russia, India and China—where employment totals approximately 98,000. India experienced the largest growth, up 22,200 to approximately 74,000 employees at year end. Higher employment in these countries reflects growth within these markets, as well as the company’s continued transformation to a globally integrated enterprise.

The complementary workforce is an approximation of equivalent full-time employees hired under temporary, part-time and limited-term employment arrangements to meet specific business needs in a flexible and cost-effective manner.

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