IBM plans to hire more than 10,000 employees in the next year, and most of these jobs are likely to be created in low-wage countries like India and China.

Quoting IBM Chief Executive Sam Palmisano, Australian IT, said that the computer giant will also retrain 100,000 employees for computer services and software work.

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Palmisano visited India in May this year. IBM has 5,000 employees in India, which has the world's second-largest pool of technical workers after the United States.

Starting wages for a computer programmer in India are $5,000-$7,000 a year, compared with $45,000-$75,000 in the US, according to Stephanie Moore, an analyst at Forrester Research, said the Australian IT.

"At least 50 per cent of the new jobs will be in low-cost countries," Moore was quoted as saying.

"India is so strong right now because the cost is low and the quality is unbelievably high," said Moore.

"Smaller competitors such as Accenture, Affiliated Computer Services, BMC Software and EDS are adding workers in India, as software and service quality improves there," said the Australian IT.

Forrester recently said that 3.3 million US service jobs will move abroad in the next 15 years to countries like India, China and the Philippines.

Most of these jobs will be from the computer and software industry.

The Australian IT said that IBM will add workers next year "because information-technology spending may be accelerating and the economy has stabilised."

IBM had 316,000 employees at the end of 2002.

"We are committing $200 million (A$282 million) to train and educate 100,000 existing employees to compete for these new high-skill jobs," Palmisano was quoted as saying.

The hiring plan may indicate an employment turnaround by US companies, Australian IT said giving analysts' view.

The information technology industry will create 1.5 million jobs in the next two years, Palmisano was quoted as saying. "Much of that job creation will occur in the most innovative segments," such as high-value services, software for linking different computer systems and the Linux operating system, said the Australian IT.

Besides the 10,000 new hires, IBM will gain jobs by taking over computer departments from clients, the company's spokesman Joe Stunkard was quoted as saying by the Australian IT.

IBM's hiring rate will be higher than the rest of the world this year, Stunkard says. IBM has workers in 70 countries, and it has moved more than half of its staff outside of the US since 1987.