15,000 jobs could go in massive layoffs at IBM
IBM employees fear the worst after rumours spread that a massive round of layoffs could hit as many as 15,000 jobs worldwide on Thursday.
The IBM union Alliance@IBM says it has seen internal IBM communications and expects at least 10,000 workers to face the chopping block. “According to internal memos, IBM managers are said to have put the finishing touches last Saturday on lists of employees to be laid off,” the union said. Employees in IBM’s struggling hardware business are thought to be particularly vulnerable to the cuts.
Reports in today’s business press say the employee count at IBM – the world’s biggest computer-services company - dropped for the first time in a decade this year after it cut costs in attempts to meet ever-higher profit targets.
UNI Global Union is the global trade union for the IT sector and represents IBM workers worldwide. Head of UNI ICTS Alan Tate said, “IBM needs to realise that their workers are by far and away their biggest asset. The workers we represent are sick with nerves at what is happening.”
“IBM might argue that it is such a large company that 15,000 jobs represents a drop in the ocean, but this could be 15,000 families set adrift at a time of growing uncertainty in the jobs market. Alternatives to such drastic layoffs exist, even for companies looking to cut costs.”
According to Bloomberg, IBM is aiming for $20 a share in adjusted earnings by 2015, up from $11.67 in 2010 – a target made increasingly difficult after seven straight quarters of falling revenue. “To get there,” Bloomberg says, “Chief Executive Officer Ginni Rometty has fired and furloughed workers, sold assets, cut IBM’s tax rate and bought back shares.”
IBM chief financial officer Martin Schroeter said on record that the company will spend up to $1 billion on “workforce rebalancing,” in 2014. According to Alliance@IBM, Bernstein Research analyst Toni Sacconaghi earlier this month issued a note to investors in which he estimated impending cuts at some 13,000 jobs.
“Earlier, we had heard the date of 01/24 for selection submission, 02/22 for final lists of those selected to go back to the managers, 02/25 for all managers to receive the RA package materials for each selected employee, and 02/26 for formal notification to the selected employee,” wrote one IBM employee on the Alliance@IBM forum.
Not all the anticipated layoffs will come from workers losing their jobs. Up to 7,500 jobs are expected to shift to Lenovo’s payroll owing to the Chinese manufacturer’s recent purchase of IBM’s x86 server business. But, “apprehension among workers at IBM locations in New York state and IBM’s Research Park Triangle in North Carolina is palpable,” the alliance said.