IBM is planning to axe thousands of jobs in Britain, Germany and Ireland as part of a broader move to shift much of its workforce to cheaper outlets in eastern Europe, China, India and South America, the Observer has learned.
IBM workers in India earn an average $5,000 a year, compared with between $50,000 and $80,000 for a similar job in the US.
The expected European job cuts come on top of 5,000 recent layoffs at IBM in America. The US cuts brought the total number of redundancies on IBM’s home turf to around 9,600 for the first three months of the year.
Weeks after slashing nearly 5,000 jobs, IBM is expected to shift the work of a large number of U.S. workers to IBM employees working in India, the latest example of a successful company that is continuing to slash costs and take advantage of cheap Asian labor, WSJ reported.
Update (March, 25, 2009): IBM to cut 5,000 jobs in U.S: According to Reuters: “The job cuts will account for over 4 percent of IBM’s U.S. workforce, which totaled around 115,000 at the end of 2008. The sources, who were not authorized to speak publicly on the issue, said the cuts will mostly be in IBM’s global services business, which includes outsourcing and consulting services.”
BusinessWeek also reports (“IBM Cuts Jobs As It Seeks Stimulus Money“): “..the company would be cutting high-skill positions domestically as it and others jockey for new business from the $787 billion stimulus package Congress enacted in February”
The climate is warm, there’s no shortage of exotic food, and the cost of living is rock bottom. That’s IBM’s pitch to the laid-off American workers it’s offering to place in India. The catch: Wages in the country are pennies-on-the-dollar compared to U.S. salaries.
Under a program called Project Match, IBM will help workers laid off from domestic sites obtain travel and visa assistance for countries in which Big Blue has openings. Mostly that’s developing markets like India, China, and Brazil.
IBM’s not-so-secret layoffs may have reached 4,200, according to Alliance@IBM, which believes that thousands of other employees will be losing their jobs as well before the cuts end.
According to Lee Conrad, a former IBM employee who is now the national coordinator of Alliance@IBM, about 1,200 employees who work in IBM’s systems technology group at sites around the country have been laid off, and about 200 in the research division were let go as well. These reports bring the total layoff count at IBM to about 4,200.
According to Yahoo Tech: “One message states that IBM will announce 16,000 layoffs on Jan. 23, affecting workers worldwide. Similar predictions are made in other recent posts on the site, which is run by the Alliance@IBM/Communications Workers of America Local 1701, aunion that is trying to organize IBM workers.”
“The union, while still in an organizing phase and not yet recognized by IBM, has about 6,000 members, including IBM employees and retirees, according to national coordinator Lee Conrad. But because the union has not reached an employment contract with IBM, there is “not an awful lot” it can do except raise awareness of the issue”.
An unofficial online employee Web site, IBMemployee.com, says massive layoffs are coming to Big Blue later this month, according to Times Herald-Record.
“All divisions in IBM will be affected,” says one entry, adding the majority of those cuts will be announced Jan. 23.
“Several more posts say approximately 16,000 employees, mostly in the U.S., will be affected.”
IBM has more than 386,000 employees worldwide, according to its Web site. If the rumored 16,000 figure proves accurate, then, it would equal roughly a 4% reduction in headcount.
IBM’s been cutting people every couple of weeks, but they’re small, silent cuts. What we’re concerned about is a massive one, according to various insider sources.
IBM Profit Tops Forecast; Outlook Better than Expected, according to CNBC: “The guidance of $9.20 is awesome… looks like their outsourcing, packaging, cost containment strategy is working. They executed really well..”
Update 5 (Jan 21, 2009):
According to rumor, IBM started to cut sales and engineering positions in US.
The arguably more-important indicator of IBM’s performance — its top line — fell 6.4%, according to WSJ
Update 6 (Jan 22, 2008):
IBM confirms job layoffs: “28 out of 45 cut,” according to a another entry, from Austin, Texas. “Young and old, top and bottom performers. Never show me great 4Q numbers again.”, according to Betanews
IBM employees reported yesterday that the layoffs are already happening in IBM software and distribution divisions in the US and Canada, according to multiple news sources
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