IBM Quietly Downsizes

There had been rumors that IBM (News - Alert) was going to have a major downsizing starting January 23^rd. According to reports by the Associated Press, IBM did as projected.

 

The Armonk, N.Y.-based company cut thousands of jobs over the past week, including positions in sales and the software and hardware divisions. IBM says the cuts are simply part of its ongoing efforts to watch costs however the company won't release specific numbers, even as reports of firings stream in from IBM facilities across the country.

 

As TMC (News - Alert) reported other tech companies such as Intel Corp., Microsoft Corp and Google Inc. have all publicly revealed job cuts as part of their strategies for riding out the economic crisis. Sprint Nextel Corp. has also reported job cuts. Based on reports from the AP, more than 20,000 jobs will be lost from those companies alone.

 

One estimate, according to the Associated Press, of IBM's recent cuts put the number of jobs cut at more than 4,000 since IBM's fourth-quarter earnings announcement last week which forecasted at least $9.20 per share in profit in 2009 putting IBM shares up more than ten percent since then.

 

In IBM, workers have reported layoffs in Tucson, Ariz.; San Jose, Calif.; Rochester, Minn.; Research Triangle Park, N.C.; East Fishkill, N.Y.; Austin, Texas; and Burlington, Vt.

 

IBM is not releasing anything publicly about the job cuts saying they don’t have to. Since the Securities and Exchange Commission requires companies to disclose only "material" events, IBM considers its job cuts a regular part of the company's business model, since thousands of jobs are cut every year but are usually added back in other places.

 

By the end of 2008, IBM reported staffing close to 400,000. Those who have been recently laid-off by the company are hitting up online job bards complaining about the company’s sneaky ways.

 

The Associated Press reviewed one document sent to laid-off workers that identified some of the positions that were cut. Employees weren't identified by name, but positions and the workers' ages were listed. The document listed nearly 3,000 jobs.

 

Jim Gallo, 48, who said he worked in IBM software support for 27 years, was among those let go from the Vermont facility. Gallo, who was drinking a Grey Goose and ginger ale at nearby Lincoln Inn on Tuesday, said he hadn't told his four children yet.

 

He said he has until Feb. 26 to find another job in IBM, but he put his chances at "slim to none." Gallo said he gets six months' pay as part of a severance package, meaning IBM is giving him one week severance for every year served.

 

"It's too bad they're not doing what they were doing before. They offered some sweet packages for people to jump out," he said.

 

IBM's ongoing labor adjustments have led the company to add bodies in cheaper and higher-growth parts of the world, like India.

 

In 2007, the last full year for which detailed employment numbers are available, 121,000 of IBM's 387,000 workers were in the U.S., down slightly from the year before. Meanwhile, staffing in India has jumped from just 9,000 workers in 2003 to 74,000 workers in 2007.