IBM Cuts 450 Chip Manufacturing Jobs

IBM on Monday laid off 450 workers at its U.S. computer chip manufacturing facilities, a company spokesman said. The cuts included 300 jobs at IBM locations in Poughkeepsie and East Fishkill, N.Y., and 90 positions at a plant in Burlington, Vt. The remainder were "scattered around the U.S.," IBM's spokesman said.

The spokesman said the layoffs were the result of redundancies created when IBM recently merged the technology and manufacturing parts of its chip making business into a single operating unit. "This is about eliminating duplication and streamlining the operation," the spokesman said.

IBM's semiconductor division is focused primarily on its Power Architecture processors, which are used in IBM servers. The group also has done extensive semiconductor research -- copper interconnects, Silicon Germanium (SiGE) and Silicon on insulator (SOI) -- to improve performance. The division includes IBM's custom processor business, which helped co-develop the Cell processor for Sony's next-generation PlayStation game console.

The layoffs included workers involved with packaging and testing, technology development and supply chain operations, said the spokesman. IBM is offering affected employees severance packages that include one week's pay for each six months worked, as well as transitional medical coverage and outplacement services.

IBM's chip manufacturing business has been slow of late. The company reported that the unit's sales were off 9% year-over-year in the second quarter.

IBM also has been trimming its U.S. payroll in recent months. In May, the company announced a staff reduction of about 1,300 employees, most of whom were employed in its Global Services outsourcing unit.