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Job cutbacks continue to mushroom at IT vendors

By Patrick Thibodeau; John Ribeiro
February 2, 2009 12:00 PM ET

Computerworld - The list of IT vendors that are laying off workers grew even longer last week, with companies such as SAP AG and Sprint Nextel Corp. announcing cutbacks.

In doing so, they joined Microsoft, Intel, Sun Microsystems, EMC and other top vendors that had already disclosed layoff plans in response to the worldwide economic recession.

And then there's IBM. Without announcing any layoffs, it has let more than 4,600 workers go over the past two weeks, according to the Alliance@IBM labor union, which expects more job cuts at the company.

Alliance@IBM, a Communications Workers of America local that doesn't have enough members to gain official recognition as a bargaining unit, has gotten its information from IBM workers who said they have been laid off. Many have also posted accounts of what's happening at the company on the union's Web site.

IBM confirmed that employees were being let go, but it refrained from using the word layoffs to describe the ongoing cuts. And spokesman Doug Shelton said that IBM doesn't plan to disclose the number of jobs being eliminated.

"This is an ongoing process that we do throughout the year to match skills and resources with our client needs," Shelton said. "We don't think it's necessary every time we do that to make an announcement about it."

Other vendors are acknowledging that their cutbacks are a direct result of the economic crisis. For instance, SAP, which plans to cut 3,000 jobs by year's end in order to reduce costs, said that it won't issue any software revenue forecasts because of the economic and business uncertainties.

2008 "could have been the best year in SAP's history," co-CEO Leo Apotheker said last week. "But since September, we've been talking about a new reality in the world's economy."

The layoff numbers are eye-catching: 8,000 workers at Sprint, 6,000 at both Intel and Sun, and 5,000 at Microsoft (see related story).

Even so, some of the vendors are still doing some hiring as well. Microsoft CEO Steve Ballmer said in a Jan. 22 e-mail to employees that the net workforce reduction at the company would be more like 2,000 to 3,000 people over the next 18 months. The software vendor currently has more than 700 open jobs in the U.S. listed on its careers site.

Meanwhile, IBM lists 3,200 job and internship openings worldwide, more than 550 of them in the U.S.

John Ribeiro writes for the IDG News Service.

This version of the story originally appeared in Computerworld's print edition.

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