IBM layoffs reaching 3000, union group claims

The rumors of layoffs began before IBM recorded a strong Q4 that capped a solid 2008.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 1/26/2009

IBM has laid off nearly 3000 employees, according to a union group.

Alliance@IBM, an IBM employee organization that is not supported by the company, has reported more than 2800 employees have been laid off from IBM's software and sales and distribution divisions, with additional cuts expected.

The majority of the reported cuts have impacted Big Blue's North America-based employees, according to the alliance. Reports have pegged IBM's Toronto; Poughkeepsie and East Fishkill, NY; and Burlington, Vt, locations as those impacted by the rumored workforce reduction. IBM's New York and Vermont locations were subject to workforce changes in 2008, as well, with the company cutting 180 positions in Burlington in July and announcing it would end its 20% premium pay compensation for employees there and in East Fishkill.   In Q3 2007, IBM laid off 450 employees from the three US locations, following a broader 3000 workforce reduction made in Q2.

“There is a growing concern among employees that IBM will accelerate the off-shoring of our jobs," said Tom Midgley, president of the alliance, in a statement. "To offshore US jobs in the middle of an economic crisis and rising unemployment is simply unacceptable. We will work with our elected representatives to push for legislation that protects US jobs and calls for the full disclosure of IBM’s offshoring and outsourcing of American jobs.”

IBM did not immediately respond to requests for comment.

The rumors of layoffs began before IBM recorded a strong Q4 that capped a solid 2008. Besting many tech companies, IBM reported December quarter net income of $4.4 billion, up 12% year over year, on revenue of $27 billion, impacted by strong US dollar, down 6% year over year, or down 1% year over year when adjusting for currency. For the full year, IBM reported record revenue of $103.6 billion and record earnings per share of $8.93. When IBM reported earnings on January 20, Chairman and CEO Samuel J Palmisano said that based on IBM's "strong financial position, solid recurring revenue and profit streams, and global reach," he was "confident about 2009."

The rumors were accompanied this month by an announcement from IBM that it will open a new technology service delivery center in Dubuque, Iowa, creating up to 1,300 jobs by 2010.