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June 21, 2013

IBM Laying off 3,000 Employees in Light of Disappointing Q1 Sales

By Tracey E. Schelmetic, TMCnet Contributor

Some employees at Big Blue are likely feeling pretty blue today. IBM (News - Alert) employee organization Alliance@IBM is announcing that the company has embarked on nearly 3,000 layoffs. The eliminations were announced last week, but the cuts weren’t made until this week. About 2,930 people received pink slips, said Alliance@IBM, which used data from workers’ severance packages to arrive at the precise number, since IBM normally does not disclose layoffs to the press, nor even headcount by location.



IBM refers to such layoffs as “resource actions.” The layoffs are likely in response to the company’s 5-percent drop in sales it saw in the first quarter of this year.

One-fourth of the layoffs were from IBM’s plants in East Fishkill and Poughkeepsie, N.Y. Alliance president Tom Midgely says local employees at the New York facilities were “a little bit stunned” by the extent of the cuts, according to Poughkeepsie’s Times Herald-Record. 


Image via Shutterstock

 “Until it hits, there’s not as much emotional impact,” he said. “People this time are pretty shaken by it.”

IBM was required to file “worker adjustment and retraining notification,” also known as WARNs – with the New York State Department of Labor, which requires these notices if impending layoffs involve more than 33 percent of a workforce, or more than 250 full-time workers from any single facility.

An IBM spokesman confirmed cutbacks are happening but provided little by way of details: "IBM is investing in growth areas for the future: big data, cloud computing, social business and the growing mobile computing opportunity," the spokesman told CRN.

"The company has always invested in transformational areas, and as a result, we need to remix our skills so IBM can lead in these higher-value segments in both emerging markets and in more mature economies. Change is constant in the technology industry and transformation is an essential feature of our business model. Consequently, some level of workforce remix is a constant requirement for our business. Given the competitive nature of our industry, we do not publicly discuss the details of staffing plans," the spokesman said.

The cutbacks are occurring across several divisions, including the Systems & Technology Group, the Software Group, Global Business Services, Global Technology (News - Alert) Services, and research and development.




Edited by Alisen Downey
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