Report: IBM plans to cut more U.S. jobs, shift work to India

Offshoring move affects 'a large number' of jobs in Global Business Services unit, Journal says

IBM plans to cut "a large number" of U.S. jobs in its Global Business Services division and shift many of those positions to facilities in India, The Wall Street Journal reported today, citing anonymous sources.

The reported cutbacks in the U.S. would be the latest round in a series of job cuts made by IBM this year as the global economic recession continues.

However, IBM didn't publicly announce the earlier cuts and refrained from describing them as layoffs. Instead, company spokesman Doug Shelton said in January that they were part of "an ongoing process that we do throughout the year to match skills and resources with our client needs."

Contacted today about the Journal's report, Shelton said that IBM does "not comment on rumor or speculation."

IBM has offered to relocate some of the workers affected by the earlier reductions to India, Brazil, China and other lower-wage countries, via a program called Project Match. However, employees who want to move overseas must be "willing to work on local terms and conditions," the company said early last month.

Paul Roehrig, an analyst at Forrester Research Inc., said today that increased outsourcing and offshoring is an inevitable trend given the globalized economy and the tremendous financial pressures that companies are facing due to the recession.

"As businesses become more technology-enabled, more and more work will land where it can be done for less," Roehrig said. "Getting there is just devastatingly difficult [for affected workers], and there's no way to diminish the amount of pain."

Copyright © 2009 IDG Communications, Inc.

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