IBM layoffs blamed on offshoring

As many as 2,000 workers may be hit in latest round of cuts

After shrinking its U.S. workforce by as many as 10,000 employees last year, IBM this week may be on its way to cutting another 2,000 workers.

IBM isn't commenting on its latest round of cuts and information about it comes from the Alliance@IBM/CWA Local 1701, which gathers its data directly from IBM employees. The Alliance, which has blamed offshoring for many of the layoffs, has been trying to win bargaining rights for employees.

"IBM is clearly offshoring things where they can," said one IBM employee who received his notice yesterday and spoke on the condition of anonymity because he didn't want to jeopardize his severance. A 10-year veteran and UNIX administrator, this employee said his customer support team once had 15 U.S.-based workers. That staff was reduced over time to just three workers in the U.S., with other members of the customer support team now in Brazil, Argentina and India.

The employee said he was not given a good reason for his layoff. "Higher ups made a decision that a certain percentage had to be cut - it was not performance-based at all," he said. Although the employee said he's uncertain about the job market, "my sense is that it is not horrendous [but] I'll have to assume that I'll have to take a cut in pay."

As of last October, IBM employed 105,000 workers in the U.S., compared to 115,000 in 2008. In 2007, IBM had 121,000 U.S. employees. It employs about 400,000 globally.

IBM doesn't discuss its jobs actions other than to explain that they are in response to shifting customer needs.

IBM's workforce is scattered around the country and it continues to hire in U.S. locations. Michigan State University, for instance, has posted a notice about an IBM recruitment fair March 8 for IBM's Michigan Delivery Center. It says the company has nearly 60 "upcoming openings" for application support specialists. A university official deferred questions to IBM.

IBM jobs are high paying and the company is a major employer in number communities, such as Burlington, Vt.

In a review last year of a bond issue for Burlington, Moody's Investors Service looked at major employers and hiring trends to assess the economic health of the community. It wrote that IBM was Burlington's single largest employer, with 5,400 workers at that point, or 5% of the area's workforce.

"IBM recently announced job reductions, with the Burlington area reportedly experiencing between 300 and 500 IBM related job losses," Moody's wrote. "These recent cuts bring the total number of workers that IBM has laid off since 2001 to about 3,000, or 15% of manufacturing employment. Additional workforce reductions at IBM present considerable downside risk"

It was not immediately clear whether the Burlington workforce was affected directly by the latest round of cuts.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com.

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