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'Black Thursday' at IBM doesn't darken region's economy

Posted March 27, 2009

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— Hundreds of IBM employees in Research Triangle Park were laid off Thursday, but economic development officials said the region would survive the latest round of cuts.

In RTP, some 300 people were cut as part of what IBM (NYSE: IBM) calls a “resource action." Overall, the company planned to cut 1,674 employees in the Application Services unit of the Global Business Services group, according to an internal document provided to WRAL.com and LocalTechWire on Wednesday.

The GBS unit is IBM’s largest, with some 180,000 employees.

Alliance@IBM, a union seeking to represent IBM workers, dubbed March 26 “Black Thursday.”

"I just knew it was going to be one of those days," said Patricia, an IBM employee who declined to give her last name.

Patricia, who has worked for IBM for 11 years as a business analyst, was told she would be laid off in two months. She's on vacation and called in to learn her job is being shifted to Brazil.

"It's very hard to know I'm not losing my job because I'm not doing it well," she said. "I'm losing my job because someone else is doing it cheaper."

Ten vice presidents were among those being laid off or offered the chance to find jobs elsewhere in the company, according to the internal document.

Alliance@IBM coordinator Lee Conrad told LocalTechWire and WRAL.com that rumors of 4,000 layoffs were circulating. Most jobs were being moved overseas.

A comment section at the union's Web site contained numerous posts warning about layoffs. The comments were from people who claimed to work at IBM.

An IBM spokesman declined comment. The company seldom announces or confirms layoffs.

Big Blue, which recently cut thousands of jobs in its software, sales, semiconductor and finance work groups, reduced its U.S. work force by 6,000 in 2008 while adding 18,000 jobs overseas. Of nearly 400,000 employees, some 115,000 are based in the U.S.

The Triangle is IBM's largest single location, with about 11,000 employees, but economic development officials said the region would be able to bounce back from the latest round of layoffs.

Since the beginning of 2007, companies in RTP reported 268 job losses to the state Employment Security Commission, compared with 3,948 following the dot-com bust in 2001-02.

Charles Hayes, president of Research Triangle Regional Partnership, said RTP is on fairly solid economic footing. Still, the region cannot afford repeatedly layoffs, he said.

"It's imperative that we do all we can right now to get every job we can because every job is critical to our long-term success," Hayes said.

Patricia agreed that action is needed to turn the economy around and halt the layoffs.

"Certainly, something has to be done. We can't keep up with this pace. Something has to happen," she said.

IBM's profits increased in the latest quarter by 12 percent, which exceeded Wall Street's expectations, and the company has projected profitability for 2009.

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