March 25 (Bloomberg) -- International Business Machines Corp., the world’s biggest computer-services provider, will cut about 5,000 jobs today and tomorrow, according to a person familiar with the matter.

The reductions will primarily affect U.S. jobs in the business services unit, according to two people with knowledge of the situation who declined to be identified. Worldwide, the division accounts for about a fifth of sales.

IBM had already cut at least 4,000 positions since January, joining technology bellwethers Microsoft Corp. and Intel Corp. in trimming payrolls to cope with the recession. U.S. employers have eliminated more than 823,000 jobs since November, driving up the jobless rate to 8.1 percent last month, the highest level in a quarter-century.

IBM had previously eliminated positions in other divisions, such as software and sales, according to severance agreements sent to affected employees. Those documents were provided by the Alliance for IBM, an employee group seeking union recognition. The company, which also cut more than 2,000 positions in 2007, had almost 400,000 employees at the end of last year.

“I don’t believe this is the end,” said Lee Conrad, coordinator for the group. “We’re losing jobs at a record rate inside IBM.”

The stock dropped 35 cents to $97.95 at 4:01 p.m. in New York Stock Exchange composite trading. It has risen 16 percent this year, compared with a 3.7 percent increase for the Standard & Poor’s 500 Information Technology Index.

Budget Cutting

The business services division, which helps customers manage finances and business strategy, generated $19.6 billion in 2008 revenue. Sales fell 4.5 percent last quarter as corporations pared budgets to deal with the economic slump. Technology spending may drop 9 percent this year, more than twice the rate previously forecast, Goldman Sachs Group Inc. said this month.

Microsoft, the world’s largest software maker, said in January that it would cut as many as 5,000 employees in its first-ever companywide layoffs. Intel, the world’s largest chipmaker, is shuttering five plants to cut costs as demand slows, affecting up to 6,000 jobs.

The Wall Street Journal reported today that the company is moving some work to India. IBM, based in Armonk, New York, has bolstered its workforce in Brazil, Russia, India and China since 2007.

Almost two years ago, Chief Executive Officer Sam Palmisano said IBM would probably double sales in those countries by 2010. That revenue advanced 18 percent last year, with growth in India outpacing the other regions, according to regulatory filings.

The company frequently prunes employees. IBM spends about $300 million to $400 million annually on job-cutting expenses, Chief Financial Officer Mark Loughridge said in January. The costs in 2009 will probably be in that range, with more of the expenses coming in the early part of the year, he said.

To contact the reporter on this story: Katie Hoffmann in New York at khoffmann4@bloomberg.net

Last Updated: March 25, 2009 16:10 EDT