IBM begins layoffs

By John G.Spooner, CNET News, 24 May, 2002 14:29

NEWS

IBM began handing out pink slips to employees on Thursday, the first step in anticipated companywide cutbacks. IBM has notified approximately 1,000 employees in its server division that their jobs are being eliminated, according to a representative from Alliance@IBM, a union. Alliance@IBM added that it believes about 900 other employees were also notified this week that they will lose their jobs, for a total initial reduction of 1,900 employees. The layoffs were widely expected after the company experienced a steep slowdown in first-quarter sales. "The server division announced 1,000 cuts (at locations) across the company today," said Lee Conrad, national coordinator for Alliance@IBM. The layoffs were announced at an employee meeting, he said. An IBM representative said that Alliance@IBM is not an officially sanctioned IBM union. But she confirmed that the server division began a "job resource action." "We look at ways to eliminate redundancies and consolidate work, and that helps us achieve greater efficiencies for the business. It's just the prudent thing to do," IBM spokeswoman Jan Butler said. Butler would not confirm the number of employees affected by the action. Some cuts, though, are coming at IBM's facilities in Rochester, Minnesota, where its iSeries servers are designed, according to IBM spokesman Tim Dallman. He said about 150 positions out of a total of 5,000 are being cut at the site. The cuts are the result of work to share server technologies across IBM's four server lines, Dallman and Butler said. Notified employees stay on IBM's payroll for 30 days, Dallman said, and are eligible to apply for other IBM jobs. Though employees are losing jobs, no specific programmes were cut, Butler said. Some employees are being offered the chance to move to new locations if their server research and development work is being consolidated in a different place, she added. Alliance@IBM's Conrad also noted that employees in different divisions were given notice, including about 475 people at IBM's storage group in San Jose, California, 100 to 150 people in the company's Software Group and about 250 people in various positions at the company's Research Triangle Park, N.C., campus. The layoffs come as no surprise after IBM chief executive Sam Palmisano told Wall Street analysts last week that the company needed to cut costs. Palmisano became IBM's chief executive in March. "There are other areas of our business that we need to be more efficient in. We know it," Palmisano told attendees at the company's spring analyst meeting in New York last week. "You'll hear more about what we are doing to address those issues to get more efficient." Indeed, it's very likely analysts will hear a lot more, according to Alliance@IBM. "We expect this to be the first wave today, and other cuts will happen next week in Global Services and Microelectronics," Conrad said. All told, most analysts expect IBM to lay off about 8,000 to 9,000 employees. But the company, they say, is likely to shed between 8,000 to as many as 20,000 through attrition and by spinning off or selling unprofitable businesses. For example, Big Blue inked a preliminary agreement with Hitachi to merge the two companies' storage divisions and create a standalone joint venture. Typically, IBM loses as many as 15,000 employees through attrition alone each year, executives have said. IBM started 2002 with just less than 320,000 employees. News.com's Stephen Shankland contributed to this report.

For all job and work-related news, or to search for a job and get information on training, go to ZDNet Jobs. If you have something to say about work and employment issues say it here at the Jobs Forum. Let the editors know what you think in the Mailroom.

Post your comment

In order to post a comment you need to be registered and logged in.

You can also log in with Facebook. Log in or create your ZDNet UK account below

By signing up for this service, you indicate that you agree to our Terms and Conditions and have read and understood our Privacy Policy. Questions about membership? Find the answers in the Community FAQ

ZDNet UK Live

ike fuelband is great for every healthminded person ! to work out! theres this website called textme4free.com that you can use to text anywhere in...

25 seconds ago by bordero on Nike's FuelBand wristband gamifies exercise

> I'm told it's somewhat annoying when people have their Macs stolen > and Apple stores treat the thief as the owner, but there you go. Ouch,...

2 hours ago by BrownieBoy on AMD Ultrathins to challenge Intel Ultrabooks

@kevinmchapman. OK, I acknowledge that 'most' was a gratuitous throwaway comment as an afterthought and too presumptuous. As to proof, as you...

7 hours ago by Moley on A tale of two distros: Ubuntu and Linux Mint

@BrownieBoy > Works really well for thieves.... >> Nice attempt to deflect the argument by tossing in a point that's totally >> irrelevant, even...

8 hours ago by Jack Schofield on AMD Ultrathins to challenge Intel Ultrabooks

fantastic that the so called piracy bills have been withdrawn. however, these anti-democracy supporters are still in the shadows so lets be alert...

9 hours ago by raskolnikof on SOPA, Protect IP support wavers in face of online protest

Please God no; teach them anything you like - thinking rationally, the uses and misuses of data, what data is and what it's not - but leave the...

11 hours ago by Tony Douglas via Facebook on Kids are the future. Teach ’em to code.

@Jack, > Works really well for thieves.... Nice attempt to deflect the argument by tossing in a point that's totally irrelevant, even it were...

1 day ago by BrownieBoy on AMD Ultrathins to challenge Intel Ultrabooks

Make that 13 people now - I got refused today at Manchester airport. I thought I was up to date on this legislation - I knew of the EU ruling from...

1 day ago by bootlegger on UK airport body scans will not be opt out

Don't forget to check out apps like GoodReader or SlideShark either, they're indispensible for people on the go in presentation situations. Best...

1 day ago by tinycg on Four top iPad apps for people on the move

Well it seems there is something a number of us agree on. Why is the Ubuntu Unity launcher so ugly? I thought perhaps it was something to do with...

1 day ago by TerryRK on A tale of two distros: Ubuntu and Linux Mint

Duplicate comments are not made intentionally. Its very good to know that now you are keeping check on this problem because sometimes a commenter...

2 days ago by Freebies202 on Microsoft fixes blog comments, speeds up blogs with open source

"the very significant number of users" and "many (most) of us" - you have no evidence for these statements. It is a fact that most users are saying...

2 days ago by kevinmchapman on A tale of two distros: Ubuntu and Linux Mint