Business

IBM workers brace for possible job cuts

Posted March 1, 2010 8:13 a.m. EST
Updated March 1, 2010 8:14 a.m. EST

Layoffs coming at IBM?

— If U.S. employees at IBM (NYSE: IBM) are on edge, there is a very good reason: Rumors and reports are circulating widely within the company and on the Internet that a new round of layoffs is going to be announced Monday.

In IBM-speak, the term for layoffs is “resource action.” Affected workers described the process as being “RA’d.”

IBM employs some 10,000 people at its campus in RTP. It has long been the largest site for the global information technology and services giant. The company recently opened a new data center in RTP that will add some 30 jobs.

IBM wouldn't discuss the reports.

"As you know, we don't comment on speculation and rumor," IBM's Doug Shelton said when contacted by Local Tech Wire and WRAL.com.

Employees at a WebSphere development and support lab in Silicon Valley have reported a “big RA” is expected there with an “estimated 40-50%” of the staff to be “RA’d” on Monday, according to a post on the Alliance@IBM Web site. The Alliance is the union affiliate that is seeking to represent IBM workers.

Other posts at the Alliance site comments section (Read the comments section here) indicate that workers in the IBM Systems and Technology Group and the Integrated Technology Delivery groups could be affected.

The increasing number of posts and other information funneled to the Web site led the Alliance to issue an alert to selected media outlets on Saturday morning.

“The Alliance@IBM is getting reports of a job cut/resource action for Monday March 1st,” wrote Alliance National Coordinator Lee Conrad.

“We always expect cuts,” Conrad told Local Tech Wire and WRAL.com. “It is the date that is the guessing game.”

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 under way 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.”

In his e-mail alert, Conrad noted the posting from Silicon Valley, which reads:

“Bay Area Lab (Foster City, CA) - Software (WebSphere Process Server development and support). Big RA on Monday 03/01. Estimated 40-50% will be RA'd in the lab.1on1s ready for Monday morning. It's really sad after a huge effort in the 4th quarter working late nights and weekends for nearly 3 months. Other labs in San Francisco Bay Area-Silicon Valley will be affected.”

“Other comments point to IBM ITD and STG divisions,” Conrad added.

“Number of cuts unknown until we get a resource action package from a terminated employee.

“Will know more Monday.”

If made, the layoffs would come just weeks after IBM announced a record profit of $13.4 billion in 2009.

IBM shares closed at $127.16 on Friday. Shares have traded as high as $134.25 in January.

“Last year IBMers remember the company also announced record profits and the very next day terminated about 5,000 employees around the country,” Conrad, a former IBM veteran who worked 26 years at Big Blue, told a New York newspaper recently.

“So when employees look at record profits, they don’t see any connection between record profits and them keeping their job. All they see is shareholders doing well and employees finding the unemployment line,” he added.

Citing IBM annual reports, Alliance@IBM notes that IBM has cut its U.S.-based workforce by nearly 30,000 over the past four years from 133,789 to 105,000.