Further re: Hitachi announcement

Further re: Hitachi announcement 

    LONDON-(BUSINESS WIRE)-June 4, 2002-

             IBM Announces Actions to Strengthen Strategic
     and Competitive Position; Anticipates Second-quarter Charge

IBM today announced a series of actions to improve further the
company's competitive and strategic position in the changing
information technology industry.

As announced yesterday, Hitachi Ltd., has agreed to purchase IBM's
disk drive operations and form a new company majority-owned by
Hitachi. In addition, IBM and Hitachi are proceeding with separate
negotiations related to a planned multi-year alliance to research and
develop open technologies for next-generation storage networks,
systems and solutions. The companies have created a process to review
joint projects designed to improve interoperability, reduce complexity
and improve cost of ownership for storage systems customers.

IBM also is realigning its Microelectronics Division to increase
operational efficiencies and capitalize on emerging growth
opportunities. As part of this realignment, the Division will increase
its use of leading-edge copper technology and close older aluminum
technology capacity. The Division will increase its focus on
custom-chip design and manufacturing, and advanced foundry, while
adding new technology design services, which were announced today.

Further, IBM is rebalancing skills and reducing its workforce in other
business units and headquarters staffs. These actions will enhance
IBM's competitiveness by improving productivity and operational
efficiencies over the long term. The majority of the employees
affected by these actions have been notified.

As a result of all of these actions, IBM will record pre-tax charges
of approximately $2.0 billion to $2.5 billion, primarily in the second
quarter. These include charges associated with the company's exit from
the hard disk drive business, write-offs of assets in the
Microelectronics business, and charges related to productivity
initiatives, principally workforce reduction.

'These actions will not only substantially lower IBM's annual
operating expenses, more important, they strengthen the company's
strategic position in the near and long term,' said John R. Joyce,
senior vice president and chief financial officer.

'We are moving quickly to occupy the strategic areas in the technology
and storage marketplace,' added Nick Donofrio, senior vice president,
Technology and Manufacturing. 'At our core, we are a technology
company, and we will continue to focus on leading-edge products, such
as our copper technology, and move away from maturing technologies,
and align our operations to meet that shift in demand. The actions we
are taking now will better position IBM in areas where there is both
long-term growth and profitability.'

IBM will describe today's actions in additional detail when the
company announces second-quarter results in mid-July.

   Short Name: Intnl Bus. Mach
   Category Code: FUR
   Sequence Number: 00000233
   Time of Receipt (offset from UTC): 20020604T211507+0100