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IBM layoffs top 1,600 across several work groups, union reports

Posted March 1, 2010
Updated March 2, 2010

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— Just as IBM workers feared, Big Blue began a new round of layoffs on Monday.

According to Alliance@IBM, the union seeking to represent IBM (NYSE: IBM) workers, verified through various sources that IBM cut its payroll in at least 13 groups by more than 1,600 positions.

“We have been able to verify almost 1,000 employees cut today,” Lee Conrad, the union’s national coordinator, told Local Tech Wire and WRAL.com before figures were updated later in the evening.

“It could go higher,” he added. “We haven't received all the RA packs yet.”

Moments later, Conrad said verification of another 200 cuts came in to the union.

By 8:30 p.m., 12 work groups reported 1,518, according to data provided to the union. Later, the addition of another work group pushed the day's total to 1,614.

RA refers to “resource action,” the IBM terms for layoffs. The packs is a reference to the packets of information given to each IBM worker notified that he has been in worker speak “RA’d” – or “selected” to participate in the job force reduction, as IBM describes it.

“The Alliance believes this is another example of IBM firing US workers and moving the work offshore,” Conrad added.

“Some of the employees have told us that they have been terminated while training offshore replacements. It is time our political leaders called IBM to task on this.”

Workers who were notified about being laid off can seek other positions within the company.

Local Tech Wire and WRAL.com reported on Saturday that the “resource action” – what IBM calls layoffs – would begin Monday.

An IBM spokesperson in RTP, where IBM employs some 10,000 workers, declined comment about the layoffs. IBM employs some 105,000 people in the U.S. but has cut its work force here by nearly 30,000 over the past four years.

Doug Shelton, director of corporate media relations who is based in New York, also declined to talk about the layoffs.

"As you know, we don't make public announcements or comment on details regarding this topic," Shelton said when contacted by LTW and WRAL.com. "What I can tell you is:

"We remix our skills and structure to meet the changing needs of our clients."

Where the layoffs will take place geographically is not clear.

The IBM CIO Application and Infrastructure group took the largest hit early on with 160 workers notified as of 5:30 p.m. EST.

The Software Group Information management unit plans to cut 99 people, according to an IBM “resource action” packet obtained by Local Tech Wire and WRAL.com.

Among those, the ages ranged from 26 to 68 and 69. Of the 99 workers affected, 19 are age 60 or over.

The breakdown by work group as reported by the union:

  • STG Technology Development: 24
  • STG Sales Support: 80
  • CIO Application and infrastructure: 160
  • Software Group WPLC: 50
  • Software Group Information management: 99
  • GBS Global Account: 98
  • GTS Security Systems: 41
  • ITD Transition, Quality and Service Management: 276
  • ITD Application Hosting and Database: 158
  • ITD Service Management Delivery: 66
  • ITD Storage Management: 178
  • ITD Distributed Server Management: 318
  • GTS North America East IMT Region Maintenance & Technical Support Resource Action: 66

Other workers in Australia, New Zealand and the United Kingdom are already being affected.

The Register in the U.K. has confirmed that negotiations are underway with workers there for voluntary buyouts with employee decisions expected by March 8.

Meanwhile, at least 200 workers in Australia have been affected, according to the Alliance site.

However, the resource action in Australia could actually affect 800 employees, according to the information technology news publication iTnews.

The Australian Services Union told iTnews that IBM is considering offshoring jobs to lower-cost centers in India and China. One source said managers were told about the cuts last Wednesday.

iTnews quoted IBM spokesperson Matt Mollett as saying that IBM “continuously transforms its business, rebalancing skills and capabilities in order to meet the changing needs of clients and our business as a whole.” He also said IBM would "continue to hire in 2010, and ... end the year with more employees than when the year began.”

50 Comments

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  • ladyblue Mar 2, 2010

    How much did corporate tax rates increase in 2009? ken D

    But they know they are coming so they are getting rid of expenses now. after all 2009 was still tax laws under the bnush administration.....

  • ladyblue Mar 2, 2010

    I just don't know how our country can keep surviving all these layoffs. I don't thin our government is honest with us either in the full picture of the economy of our country. It seems liek for every one job created with stimulus money the country looses 100 jobs somewhere else. I dont' see it getting any better. May the families affected here get through the rouogh times ahead.

  • CrewMax Mar 2, 2010

    I guess the "rumor and speculation" were right on, again.

  • teacher-mom Mar 2, 2010

    Shame on IBM.

  • Ken D. Mar 2, 2010

    "You are clueless."

    And you, I take it, have some expertise in this area?

  • whatusay Mar 2, 2010

    ken d......if the US Government would lower the "corp tax rate" from 35% to 15% no one would be leaving. You are clueless.

  • Ken D. Mar 2, 2010

    "California and New Jersey are losing millions of tax paying citizens each year because of State Taxes. No different with corporations moving to foreign countries to escape higher taxes. The US Corp tax rate is around 35%, many foreign countries are charging 15-17%. You do the math."

    And this is Obama's fault how? Jobs aren't moving overseas because of corporate tax rates. They are moving because people there will work for less. The same thing moved textile jobs from England to America, then from from the northern states to the south, from the south to Mexico and Asia. It's how capitalism works.

    Or do you blame capitalism on Obama, too?

  • 5Rs Mar 2, 2010

    "The theory is that the entire nation benefits as those jobs are re-deployed on other work. The reality is corporate execs who do nothing more than crunch numbers and make "tough" decisions get fantastic bonuses and shareholders who were lucky enough to own the stock get dividends and higher share prices." - dumberthanyou2

    The reality is IBM stock prices are the same as they were 10 years ago and their dividend is less than 2%. Large, vibrant companies must, in order to survive, retool, refocus and re-orient on a regular basis, otherwise they would devolve into stagnant bureaucracy like the government.

  • whatusay Mar 2, 2010

    California and New Jersey are losing millions of tax paying citizens each year because of State Taxes. No different with corporations moving to foreign countries to escape higher taxes. The US Corp tax rate is around 35%, many foreign countries are charging 15-17%. You do the math.

  • whatusay Mar 2, 2010

    Ken D......how much will they be increasing over the next 3 years?

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