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IBM begins layoffs, won't say how many

Posted January 22, 2009

— Less than 24 hours after IBM reported profits that far exceeded Wall Street expectations, Big Blue began a series of layoffs across the company in North America on Wednesday.

WRAL Local Tech Wire editor Rick Smith writes about the local impact.

IBM confirmed launching a "resource action,” which is how the company refers to layoffs, was launched. However, a spokesperson declined to provide specific numbers or to identify what IBM locations were affected by the cuts except to say the action is for North America only.

Especially hard hit was the IBM Software Group, according to IBM workers' posts to the Alliance@IBM union Web site and in e-mails to WRAL.com and Local Tech Wire.

There have been rumors of layoffs hitting as many as 16,000 – a number predicted by one Wall Street analyst, the union and some IBM employees – but John Buscemi of IBM corporate media relations said that number was much too high.

“IBM manages its workload and its talent on a global basis,” Buscemi said. “However, today's announcement affects North America.”

An unknown number of layoffs were at IBM’s Research Triangle Park campus, which is Big Blue’s largest with more than 11,000 employees.

Several workers told WRAL.com and LTW that they or people they worked with were given 30 days' notice to find another job within the company. If the notified workers could not find other positions, they would be terminated.

Alliance@IBM, the union that is seeking to represent IBM workers, said 1,400 or more people were affected by the resource action in the software group alone.

The cuts aren’t over, warned IBM Alliance Coordinator Lee Conrad.

“I wouldn’t be surprised if Global Services was affected,” Conrad said. “We hear that on the 27th, the technology group will be hit.”

In a telephone interview, Buscemi said the company would not make any “public statement” about layoffs. “I can’t get into what groups, locations or numbers of people (are) affected,” he said.

“This is an ongoing business. There is just nothing we can talk about externally.”

Buscemi linked the resource action to an IBM earnings conference call with financial analysts on Wednesday. Mark Loughridge, IBM’s chief financial officer, was asked about work force reductions.

Loughridge said IBM planned “some acceleration” in what he called “work force rebalancing” in 2009. By rebalancing, Loughridge referred to IBM’s practice of reassigning workers or hiring workers in other locations, such as overseas, while displacing current employees.

Despite a global economic slowdown, IBM beat Wall Street expectations with a quarterly profit of $3.28 per share, the company said after the markets closed Tuesday.

Analysts had forecast a profit of $3.03 per share.



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  • bwilke21 Jan 23, 2009

    IBM is becoming the next Nortel they are just cutting all of the jobs in America because they can get a bunch of turkish people to do a similar job for a tenth of the cost. The only problem is that the customers cant understand the Turkish people and they are too stupid to know how to use a computer. So the customers drop their contracts, the CEO's get a bonus, and another once great American company goes bankrupt. Youve gotta love the american way...

  • whatelseisnew Jan 22, 2009

    "Considering that global services and outsourcing are a business model and a service offered by IBM to customers, I'd say that they have contributed a lot to the economic downturn and to the loss of many good jobs in the U.S." - Now that is a funny line. look to Washington DC. Therein lies the answer as to why so many companies are moving their operations to other countries. You tell me. Would you rather pay a 15 percent tax rate or a 30+ tax rate? Would you prefer to be in a litigious country where the government will attack you if you make what they deem to be excessive profits, or in a country that is glad to have your presence?

  • clickclackity2 Jan 22, 2009

    Oh my..EZeegoing.. I was in the area also on today! I had no idea all of those business and things were behind Wake Med. But, even so, I could easily tell it was probably unusual. It was a mad house out there. Lots of parking in areas that weren't even parking space!

  • EZeegoing Jan 22, 2009

    I drove down Sunnybrook Rd today in Raleigh and the ESC was so crowded people were parked along side the road and walking up to it. Times are tight.

  • determined2win Jan 22, 2009

    Take all the office supplies that you can on the way out; you can sell them on Ebay or Craigslist... don't forget your red stapler -

  • Ripcord Jan 22, 2009

    While everyone is complaining about outsourcing, ask yourself why companies do it. They do it because the cost of doing business in the US is very high. You can blame congress for that.

  • Ripcord Jan 22, 2009

    "Considering that global services and outsourcing are a business model and a service offered by IBM to customers, I'd say that they have contributed a lot to the economic downturn and to the loss of many good jobs in the U.S."

    Sure, there has been some job loss, but thats a CONSEQUENCE of the economic downturn, not its cause. The cause is a credit crunch brought on by a number of factors, none of which can be assigned to IBM or any other software/hardware company.

  • seeingthru Jan 22, 2009

    Yes, would pay more for American made items and who cares if Wal-mart closes! -small businesses will have a chance. People like you both encompass the downfall of this country--want more bang for your buck and do not support your country shame on you

  • FoolOnTheHill Jan 22, 2009

    bs101fly - do you actually think HP is any better? They outsource jobs as fast as possible.

  • bs101fly Jan 22, 2009

    they don't have to say, they can keep it "a secret" and we'll just find out when unemployment #'s come out!

    And go buy HP!

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