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IBM layoffs raise ire in N.Y. State Assembly

Fallout from the job cuts spread over social networks

March 26, 2009 12:00 PM ET

Computerworld - Social network Twitter and message boards brought the fallout of IBM's layoffs on Thursday to life, as employees posted the news about their job losses in real time.

But there was political reaction as well. A state Assembly member questioned how a company that receives taxpayer assistance can also cut employees and move jobs overseas.

New York State Assemblyman Greg Ball, a Republican whose district includes IBM's home county of Westchester, called for a legislative hearing to look into IBM's layoffs in light of the state's multimillion-dollar investments to help the company.

"My fear is that IBM has planned to offshore large portions of [its] business and meanwhile [is] accepting taxpayer dollars under a guise of keeping those positions here," Ball said in an interview. "And if that's the case, then those dollars should be returned."

IBM officials could not immediately be reached for comment.

Last July, New York said that it would provide $140 million in grants to IBM, which in turn was investing $1.5 billion to create 1,000 new jobs in nanotechnology. The agreement also included $65 million in provisions to help IBM retain jobs at its East Fishkill plant in Dutchess County, an area also represented by Ball.

IBM confirmed its job action but declined to provide any detail about how many employees were affected or where they were located. The Alliance@IBM, which was expecting between 4,000 and 5,000 layoffs, said by Thursday evening that it had counted 3,251 workers who had been laid off and given a severance package.

The union believes that IBM is shifting jobs overseas. One IBM employee, who wished to remain anonymous, said managers were vague about the reason for the layoffs, citing the economy generally. "All I am hearing is they have to make hard decisions based on the economy," the employee said. But the employee also pointed out that IBM's services unit was doing well and making a profit -- something the company has cited in its financial reports.

Ron Hira , an assistant professor of public policy at the Rochester Institute of Technology and author of Outsourcing America, said IBM has spelled out a plan to shift jobs to India and "they are executing on it: Jettison high-cost workers in the U.S. and substitute them for workers in low-cost countries like India."

IBM's offshoring could also raise questions about projects funded under the government's massive stimulus plan. "If policymakers want to create jobs with taxpayer dollars, then they ought to ensure this creates jobs in the U.S. and not in India or other countries," said Hira. "IBM is clearly trying to hide the fact that stimulus dollars it receives will actually create jobs overseas rather than here in America."

On a union message board, layoff news was shared.

"I just [received a] call from my manager and got 30-day notice. ... Good luck to all," wrote one, anonymously. There were messages on Twitter as well, with one person lamenting how he wished he hadn't turned on his cell phone to hear the bad news. Another asked people on Twitter to re-tweet news of his layoff.

Like others, he is now looking for a job.

Read more about IT Outsourcing in Computerworld's IT Outsourcing Topic Center.



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