IBM Layoffs Exceed 800, Workers Say

IBM cut employees in its outsourcing and server manufacturing units, among others.

Paul McDougall, Editor At Large, InformationWeek

February 28, 2012

3 Min Read

100 Years Of IBM: 25 Historic Milestones

100 Years Of IBM: 25 Historic Milestones

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IBM has laid off more than 800 workers at locations across the U.S. in the past 24 hours, according to company sources and documents obtained by InformationWeek. Many of the cuts appear to target the company's Global Technology Services outsourcing group.

Some 183 workers were laid off in the GTS application hosting unit, 179 were let go in GTS Delivery Distributed Server Management, and 128 employees lost their jobs in GTS Information Technology Services. In addition, 106 workers were laid off in IBM's Systems & Technology Group, which manufactures servers and computer chips. The cuts also impacted smaller pockets of workers in various other units.

The numbers are derived from severance documents received by workers. The documents specify the number and ages of employees laid off in particular groups. Reports indicate that some of the laid off employees worked in plants in IBM plants in Poughkeepsie and East Fishkill, N.Y., and in Dallas, Texas, among other locations.

Cuts in IBM's Public Sector arm, which handles government outsourcing contracts, and in the Global Accounts unit, hit a swath of midlevel and senior workers, documents show. Positions axed included advisory project managers, associate project managers, senior project managers, and executive project managers.

[ What IT trends are taking hold in the enterprise? Read The Rise Of The Hybrid Enterprise. ]

Early-year staff cuts have been the norm at IBM in recent years. The company cut at least 1,600 U.S. jobs In March 2009, and more than 1,300 were let go in April of 2007. IBM typically refers to unit-wide layoffs as "resource actions" or "workforce rebalancing." Under such initiatives, the company has been building up its workforce in developing markets like South America, India, and China while trimming back its U.S. roster.

IBM's U.S. headcount fell from about 134,000 employees in 2005 to roughly 105,000 in 2009, the last year it broke out its worldwide employee distribution by country. Since then, its U.S. headcount has fallen to 98,000, according to an estimate by IBM employee advocacy group Alliance@IBM, which is affiliated with Communications Workers of America, Local 1701.

IBM has said it needs to build up its workforce in regions where it's seeing growth. The company's sales in the Asia-Pacific market were up in 9% last year, compared to 7% in the Americas. But critics say that, as IBM increases its presence in countries where wages for programmers can be as much as 75% less than in the U.S., the burden of the redistribution is falling too hard on American workers.

"This is all about decreasing the U.S. IBM employee population in favor of offshore workers," said Lee Conrad, a spokesman for Alliance@IBM.

An IBM spokesman on Tuesday declined to answer questions about the layoffs, but provided the following statement in an email to InformationWeek: "IBM is constantly rebalancing its workforce. That means reducing in some areas and hiring in others--based on shifts in technology and client demand. This flexibility allows IBM to remain competitive and relevant in an industry that is constantly changing. And given the competitive nature of our business, we do not publicly discuss the details of our staffing plans."

According to documents, most IBM workers hit by Monday's cuts will receive one week of severance pay for every six months worked at the company. They will also be eligible for retraining and job search assistance and other benefits.

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About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

Paul McDougall is a former editor for InformationWeek.

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