IBM offers to shift workers losing jobs to lower-wage countries

'Project Match' lets employees take new jobs in India, other countries — but at local pay rates

Some of the workers being let go by IBM have a chance to remain with the company — if they're willing to move to Brazil, India, China or a dozen other low-wage countries. But the expatriate employees would likely be paid local wages as they begin their new lives overseas.

IBM, which is cutting thousands of employees in a move that it has refrained from describing as a layoff, is offering affected workers what it calls Project Match. The employees who can take advantage of the offer include those who have been "notified of separation from IBM U.S. or Canada" and "are willing to work on local terms and conditions," the company said.

U.S. workers have long taken jobs in other countries to get promotions or for the experience of living overseas, but corporate expats are typically paid on a U.S. wage scale. IBM said that as part of Project Match, it is offering workers financial aid to offset moving costs, assistance with visas "and other support to help ease the transition of an international move." But their wages may be similar to the pay of employees in the countries to which they're moving.

"What most of IBM's competitors are doing is just eliminating jobs and hiring people in India," said Robert Kennedy, a professor of business administration at the University of Michigan and author of the book The Services Shift. "I would say from IBM's point of view, they're trying to meet people maybe not halfway, but a quarter of the way."

Kennedy added that the appeal of a program like Project Match would likely be limited primarily to young people who don't have families or mortgages.

IBM spokesman Doug Shelton acknowledged that the program "is not for everybody." But Shelton pointed out that IBM, the world's largest technology employer with about 400,000 employees worldwide, has "many programs that assist employees who are making transitions into other jobs or even other careers." Project Match, he added, is "just one of many options available to IBMers whose jobs have been eliminated and are interested in looking for IBM opportunities worldwide."

Shelton previously described the ongoing cutbacks at IBM as "an ongoing process that we do throughout the year to match skills and resources with our client needs." IBM hasn't disclosed the number of employees being let go, but Alliance@IBM, a labor union that is trying to organize IBM workers, has counted about 4,800 job cuts over the past two weeks, based on reports from employees who said they were let go. The union expects more cuts to occur as well.

Don Dowling, an employment law attorney at White & Case LLP in New York, said that by hiring a U.S. worker at a local pay rate overseas, IBM would be getting someone who knows the company and is experienced — while also saving money. A worker "willing to move to India for IBM is worth more to them than a person hired off the street, everything else being equal," Dowling said.

In addition, many countries require the use of written employment agreements for workers who are hired locally, instead of the "employment at will" provisions common in the U.S., according to Dowling. "You've got a better basket of rights than you do in the U.S.," he said.

IBM, which reported its financial results for last year's fourth quarter on Jan. 20, is due to release its annual report next month. That typically offers some details about the size of the company's global workforce. According to data from the end of 2007, IBM had a total of 98,000 employees in Brazil, India, Russia and China, with the bulk of those positions — about 74,000 — in India.

Ron Hira, an assistant professor of public policy at Rochester Institute of Technology in New York and author of the book Outsourcing America, said it's hard to know exactly what IBM's motivation is for Project Match program. But, he added, "for workers, it is a clear indication that IBM plans on accelerating its massive offshoring of U.S. and Canadian jobs." Citing IBM India's rapid growth, Hira questioned whether Project Match was really a publicity stunt — "a way to indicate compassion with zero real costs."

Hira thinks it's unlikely that many U.S. workers will agree to move overseas, other than young people and immigrants from other countries who seek to return there. And he doesn't see a bright future for the IBM employees who do accept the offer. "American workers will be expected to take the lower wages of the new country," he said. "And even with the lower cost of living, none will be able to save enough money to return to the U.S."

Copyright © 2009 IDG Communications, Inc.

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