IBM cuts 100 contract workers

The cuts impact supplemental employees that are used as a flexible workforce in manufacturing, working for periods ranging from one to three years.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 11/6/2008

IBM has confirmed that its Essex Junction, Vt, facility has cut about 100 temporary manufacturing employees.  

IBM laid off 180 employees from its Vermont plant in June, bringing the facility’s employment levels to about 5,400. In August, IBM announced it would further eliminate a premium that it currently pays certain chip division employees in Vermont and East Fishkill, NY, and will be enacting a base-pay change ranging from 0 to 10% for the impacted workers as of January 1, 2009.

This week's cuts impact supplemental employees that are used as a flexible workforce in manufacturing, working for periods ranging from one to three years. 

"There is no impact to our regular employee population, and there is no charge or other impact to our business," IBM Spokesman Jeff Couture told Electronic News via e-mail.

The spokesman described the contract workforce reduction as part of IBM's "normal balancing of skills to meet business needs" and reminded that supplemental employees are used as a short-term, flexible workforce to respond to changing business requirements.

"Over the years, this workforce at IBM’s Vermont facility has routinely expanded and contracted to address changing business conditions and the needs of our clients. This supplemental workforce servers as a buffer, reducing the need to lay off our regular staff," Couture said.

After the reduction, the IBM Essex facility will have approximately 5,300 employees.

The spokesman said that the cutback will have "no impact on the microelectronics division's mission of providing core technology for IBM’s successful server and mainframe business, and serving leading OEM clients in the IT, communications, and consumer electronics spaces."

The contract job cuts come after IBM announced Q3 income of $2.8 billion, a year-over-year increase of 20%. Total revenues for the quarter of $25.3 billion increased 5% year over year. However, Q3 revenues for IBM's systems and technology group were down 9.5% and its microelectronics division revenues were down 27%, both compared to Q3 2007.