IBM begins layoffs, won't say how many

Posted January 22, 2009 7:30 a.m. EST
Updated January 22, 2009 7:46 a.m. EST

— 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.

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 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 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.