IBM starts job cuts; most lay-offs outside US

NEW DELHI: IBM, the world's largest computer services provider, has initiated a global restructuring plan by laying-off almost 2,800 employees in North America so far and more job cuts are in offing in other nations like India.


The restructuring plan announced in April after releasing disappointing first-quarter results will cost IBM $1 billion worldwide, including severance expenses.

Earlier this year, International Business Machines (IBM) CFO Mark Loughridge in an investor call had said the US-based firm will embark on a "workforce rebalancing", or job cuts, that will cost about USD 1 billion and the bulk of which would be outside the US.

IBM employed a total of 434,246 persons globally at the end of 2012.

When asked about the total number of lay-offs that will happen, employee group Alliance@IBM international coordinator Lee Conrad said so far 2,200 jobs have been cut in the US and Canada.

"We are still gathering data on how many jobs will be lost. Right now in the US and Canada it is 2200, but that will climb up. The Alliance will get information to members and employees on benefits they can get through various state agencies," Conrad told PTI.

According to Alliance@IBM, the official national IBM employee's union, the total number of lay-offs in North America as of June 15, 2013 are 2,792.

On lay-offs in other geographies, he said the figure is still not clear, but the union is in touch with their counterparts in other countries.

"We are also working with IBM unions in other countries to formulate a response and possible workplace actions," he added.

People closely following the developments have revealed that the total figure could be in the range of 6,500-8,000.

"However, the lay-offs reports that are coming out suggest that the total number of cuts would be less than 2 per cent of IBM's total headcount," they added.

When contacted, an IBM spokesperson said: "IBM is investing in growth areas for the future: Big Data, cloud computing, social business and the growing mobile computing opportunity.

"The company has always invested in transformational areas and as a result we need to re-mix our skills so IBM can lead in these higher-value segments in both emerging markets and in more mature economies."

In April this year, in an investor meet IBM CFO Mark Loughridge had said: "Last year, we had about USD 800 million workplace rebalancing charges spread across the year and this year we expect the workforce rebalancing charges to be closer to a billion and concentrated in the second quarter.

"Though we really haven't finished the work for a specific action, yet like last year we expect the bulk of that charge to be outside the US...."