News & Analysis

Updated: IBM cuts over 2,500 jobs

Mark LaPedus

3/4/2010 1:17 AM EST

SAN JOSE, Calif. -- IBM Corp. this week reportedly cut over 2,500 jobs, according to a union. IBM declined to comment to the reports.

''On March 1st , over 2,500 IBM employees got a rude awakening,'' according to the IBM union, dubbed the Alliance@IBM/CWA Local 1701. ''Once again, the company they toiled for turned its back on them and showed them the door and the unemployment line.''

IBM declined to elaborate. In an e-mail, an IBM spokesman said: ''We are always re-mixing the business to remain competitive. IBM is still the largest tech employer in the world and the U.S. based on available data and we expect that will continue.''

In 2009, some 10,400 workers at IBM lost their jobs despite decent results, the Alliance@IBM/CWA Local 1701 said. Many U.S.-based IBM workers lost their jobs, including within IBM's chip unit. Overall, many of those jobs were shifted offshore to India and other locations.

''In 2009 after glowing financial results IBM executives immediately started firing employees,'' according to the union. ''By the time 2009 was over at least 10,400 workers had lost their jobs. IBM executives are abandoning the U.S. workforce and moving work offshore, and to make matters even worse, bringing in foreign workers to replace US workers on contracts and accounts here. Make no mistake, the job cuts are far from over.''

Last year, IBM confirmed the layoffs in various reports, but it has been mum about the size and the extent of the cutbacks. The computer giant has been able to skirt the issue, because the layoffs fall short of 500 in a specific division, as defined by the Worker Adjustment and Retraining Notification Act, or WARN Act.


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Comments


BMG4ME

3/4/2010 9:10 AM EST

Alliance@IBM is not an IBM Union and does not represent IBMers in any form or shape.

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Mark LaPedus

3/4/2010 7:51 PM EST

OK. Maybe that's true. But should Big Blue--or other major corporations--explain the layoffs? Is offshoring a good or bad idea? Not sure about you, but I'm worried about the trends. How about anyone else?

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IBMunion

3/5/2010 9:23 AM EST

Alliance@IBM Local 1701 is part of the Communications Workers of America. We have 350 dues paying members and 5000 supporters.
We are the official Labor organization for IBM employees. Our President, Secretary and Vice President are all current IBM employees.

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davejor

3/5/2010 10:36 AM EST

Wow 350 members out of 400,000 employees. That's a "big" representation!

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IBMunion

3/5/2010 11:26 AM EST

IBM does not have 400,000 employees in the US. It is 105,000 and dropping.
Instead of you and "consultant" focusing on if the alliance is a union or our size, maybe you should see what we are about.
www.allianceibm.org

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Avagadro

3/5/2010 3:14 PM EST

The uncertainty in the US economy and the current administration's plans for the future have all companies sitting on the sidelines and waiting for the dust to clear.

In the US economy, we have the expiration of TAX cuts, a proposed CAP and TRADE bill, a healthcare bill, a HUGE deficit caused by both parties, and no one with the will to address these issues. The real unemployment number is closer to 20% than 10% and we are selling arms to one of our largest creditor's "enemy." Any wonder why everyone is hunkering down???

The world has changed and is not likely to return to what we have known in the past. Like it or not, we must learn to compete, as a country, a society, and as individuals. I fear for our children as they will be saddled with debt, they will have attended the 'dumbed down' US schools while a great portion of the ROW will be focused on practical training, thus providing an easy path for our descendents to be subjects of the People's Republic of America.

Makes IBM seem sort of trivial eh?

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Mi302

3/5/2010 3:27 PM EST

I love the union-speak: "Once again, the company they toiled for turned its back on them and showed them the door and the unemployment line."

Anyone tell this guy that the SEIU can get him a job?

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kmw997

3/5/2010 5:36 PM EST

This is not about unions. My view is that intelligence-based workers should protect their own intellectual property. Does a company have the right to say...why don't you work with these guys overseas and teach them everything you know? Then, maybe we can replace you down the line.

Make no mistake...the world is not flat. Policies and pressures do make a difference, and they tilt things in one direction or another. I am not saying they can change the direction of the waves, but they can certainly channel it one way or another. Everyone can be exploited those being displaced and those getting the offshore work. There is a difference between fair competition and predatory competition.

I believe that we have to be innovative and we can adapt, but there is a huge social cost if too many workers are simply displaced because someone say that's the way the system is supposed to work. We are living through a recession brought on by financial leverage from a small group in an uncontrolled part of the financial market. So we should pay attention and not pretend that movement of jobs and money is about "getting the cheapest product" or producing greatest ROI

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IBMunion

3/5/2010 8:18 PM EST

So why is it that there are those here that slam the Alliance and pick apart language but don't address the issues the union raises? Do you agree that IT jobs should be offshored? Do you agree that workers should be imported to work on US client accounts and dispalce US workers? It appears so.

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Avagadro

3/6/2010 3:50 PM EST

Yes, we are living through a recession brought to you by some greedy individuals that should go to jail (IMHO), but a creative financial person will always outsmart the laws on the books. They will create financial vehicles and schemes that no one has thought of and no one has regulated.

Remember ENRON - that problem was solved by SOX - Sarbanes-Oxley, and yet, we never heard a peep about why SOX didn't intervene in the financial meltdown? Why is that?? Smart people beat government people EVERY time.

And yes, pressure can be placed on governments, and you will get exactly what one would expect from the government - nothing but a large program that consumes tons of taxpayer money, and at the end of the day, it wont really matter.

The reality is- there are people around the world that will do the work that US citizens do for LESS MONEY. This includes engineering and technical people. It is sad, but it is true. If you own a company, and your competitor chooses to use offshore talent, you can follow their lead, or you can have a higher priced product. This is not always the case, but once things are commoditized or there is no intellectual property protection for the product, you are at the mercy of the free market, and no government can successfully thwart those market forces indefinitely.

As far as IP protection, that is a slippery slope. If you develop technology while working for a company, using their tools, resources, labs, computers, etc., dont you think that the company might be entitled to some of that IP???

I worked at a large Microprocessor Company who shared the wealth with the inventor for patents that ended up being "blockbusters." Of course, all companies are not that generous, but all of the IP in the world will still not defeat the forces of the free market and even if the inventor owns the IP, how can it be commercialized without capital, human resources, and physical assets, all of which are readily available inside the large companies (the same ones that don't always treat their people right).

If you haven’t read Atlas Shrugged, I would highly recommend it. Who is John Galt? This book will provide you a view of those who don't want to participate and work hard and sacrifice. Not to be too political here, but the bottom 50% of US Taxpayers are currently paying less than 3% of the taxes. This is NOT helping the US to continue our innovation and outsmart the foreign competition. When one sees 50-60% of their compensation disappear into the void of government and spent on programs that have failed miserably over the past 50 years, it is very discouraging to think about starting your own business.

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ughhhh

3/8/2010 9:05 AM EST

Here an interesting view on the consequences of down-sizing
http://www.newsweek.com/id/233131

"If people are your most important assets, why would you get rid of them?"

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Bryan 93 ?

3/8/2010 11:19 AM EST

Because the people running most of these companies have zero imagination, and like a cow they go with the herd. If outsourcing works for someone else, why would I want to do anything else?

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Mark LaPedus

3/9/2010 12:23 AM EST

Nice debate. Any other comments?

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