Government // Enterprise Architecture
Commentary
4/20/2010
01:11 PM
Bob Evans
Bob Evans
Commentary
Connect Directly
RSS
E-Mail
50%
50%
Repost This

Global CIO: IBM Layoffs Mostly Outside U.S., Despite Media Indignation

Undercutting media hand-wringing over IBM "abandoning the U.S. workforce," IBM says the cuts took place primarily in Europe and Asia.

"The Alliance@IBM/CWA Local 1701 Web site, which tracks layoffs at IBM, reports that some 2,544 IBM employees have been let go this week, with more to follow," writes Pacskowski. "And unsurprisingly, the group says off-shoring is, once again, to blame.

"Evidently, RA'd employees are being asked to train their overseas replacements before they're cut. 'IBM is shifting work offshore,' Alliance@IBM national director Lee Conrad told me. 'The company appears to be abandoning the US workforce'," concludes Paczkowski.

That's quite a theory, even from someone as hyper-partisan as Conrad. But "unsurprisingly," as Paczkowski would say, Conrad's unfounded claim and Paczkowski's unfair reporting are at odds with reality because IBM reported in its earnings call yesterday that most of those recent layoffs took place outside the U.S.

So if it is true as Conrad and Paczkowski claim that IBM is "abandoning the U.S. workforce," then how would they describe the even worse fate that's befalling IBM's non-U.S. workforce, where the brunt of the cutbacks occurred?

Here are three separate but related comments on the layoffs made by IBM CFO and senior vice-president Mark Loughridge during yesterday's earnings call per the transcript on SeekingAlpha.com:

"We are continuing to execute initiatives to increase efficiency and drive productivity, leveraging scale and our global footprint. This strategy has worked well over the last five years and will continue to produce over the next five. . . .

"This quarter our workforce rebalancing charges were about $560 million. The majority of the spending was in Europe and Asia and we expect payback by the end of the year with most of the benefit in the second half. . . .

"First of all, one you had mentioned if you look at the workforce rebalancing work we did that was predominately in Europe and Asia. So it has a slightly longer payback."

In a world more nearly perfect than this one, there would be no layoffs. But we don't live in that world, and here in this one economies rise and fall and expand and contract and responsible companies do the same. For some ax-grinding labor group to claim—and for a supposedly high-brow website to parrot the claim—that IBM is "abandoning the U.S. workforce" is both laughable and pathetic.

RECOMMENDED READING:

Global CIO: Why IBM CEO Sam Palmisano Earned His $24.3 Million

Global CIO: Hewlett-Packard And Oracle Layoffs Are Ugly But Essential

Global CIO: IBM Sees Surge In Customers' Transformation Projects

Global CIO: The Top 10 CIO Issues For 2010

Global CIO: If IBM Needs Big Growth, Who's On Acquisition List?

GlobalCIO Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

To find out more about Bob Evans, please visit his page.

For more Global CIO perspectives, check out Global CIO,
or write to Bob at bevans@techweb.com.

Previous
2 of 2
Next
Comment  | 
Print  | 
More Insights
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Elite 100 - 2014
Our InformationWeek Elite 100 issue -- our 26th ranking of technology innovators -- shines a spotlight on businesses that are succeeding because of their digital strategies. We take a close at look at the top five companies in this year's ranking and the eight winners of our Business Innovation awards, and offer 20 great ideas that you can use in your company. We also provide a ranked list of our Elite 100 innovators.
Video
Slideshows
Twitter Feed
Audio Interviews
Archived Audio Interviews
GE is a leader in combining connected devices and advanced analytics in pursuit of practical goals like less downtime, lower operating costs, and higher throughput. At GIO Power & Water, CIO Jim Fowler is part of the team exploring how to apply these techniques to some of the world's essential infrastructure, from power plants to water treatment systems. Join us, and bring your questions, as we talk about what's ahead.