IBM layoffs pegged at 419

IBM manufactures microchips at its plant in Essex Juntion. Photo by Nat Rudarakanchana/VTDigger

IBM manufactures microchips at its plant in Essex Junction. Photo by Nat Rudarakanchana/VTDigger

IBM has dropped its fight to withhold information about the number of people let go from its Essex Junction plant in a recent round of layoffs.

Department of Labor Commissioner Annie Noonan said Thursday that as of July 12, 419 employees had worked their last day at Big Blue.

IBM had argued that the tally should be kept confidential, citing trade-secrets exemptions from the Vermont Public Records Act. The state pushed back.

“I wish (they) would just peel the Band-Aid off and give us the numbers,” Gov. Peter Shumlin said Wednesday at an unrelated news conference.

In a letter dated July 18, IBM appeared to have abandoned any concern about competitive harm that could come from disclosure of the layoff number.

Focusing only on privacy considerations on behalf of its former employees, the company said it had been satisfied by Noonan’s response that no identifying information would be released about the individuals affected by the layoff.

The company said it still did not believe the Public Records Act requires disclosure of the total number, but given the efforts the state has made to assist the displaced workers, “IBM will not object … to DOL’s disclosure of the total number of impacted employees,” the letter reads.

Play-by-play

The figure was released more than a month after hundreds of workers were notified that the company’s global reorganization would put them out of work. Shumlin, Labor Department officials and employers at a state-run job fair Monday had expressed frustration with IBM for not releasing more details about the displaced workers while still preserving their anonymity.

Notification within 24 hours of a “mass separation” is mandated by the state’s Employment Security Board regulations. IBM provided that most basic notice on July 13, within a day of the mass separation (in this case defined as 25 or more employees). In response to Noonan’s subsequent request for detailed information about the individuals affected, the company submitted a list July 15, with the caveat even the tally remain secret.

Noonan gave the company until noon Thursday to make its case for confidentiality.

IBM has been secretive about its employment numbers since 2010, citing competitive reasons for not wanting to reveal the number of people employed at each of the global corporation’s facilities. The state’s Department of Labor, which tracks employment numbers for tax and other purposes, cites confidentiality requirements of the state’s labor laws (21 VSA 1314(d)) as the reason it cannot disclose the plant’s employment numbers.

Labor Department Commissioner Annie Noonan said prior to the layoffs’ effective date that IBM employed “more than 4,000” people in Essex Junction. The chip-making plant opened in 1958; past news reports pegged employment there at as many as 8,000. It is not clear whether the new employment figure is above or below 4,000. Noonan could not be reached immediately for comment.

Burlington-based Fletcher Allen Health Care, the state’s largest hospital, reportedly employs about 7,100 workers, according to the Associated Press. This would make it the largest employer in Vermont outside of state government.

Noonan said in a phone interview Tuesday that she would seek clarification from IBM to confirm whether the list she was given includes only those individuals who worked their last day Friday, or if it also includes positions that ended in the preceding month. It is possible that additional employees could have been separated in that time, or that some may yet to have finished their jobs, in which case they would not necessarily be reflected in the 419 figure.

At least 3,312 employees had been laid off from IBM locations throughout North America as of July 18, according to the Alliance@IBM, an unofficial union for the at-will workers.

What comes next

The layoffs, while personally shocking to some who received the “resource action” package — as the layoff notices are called — were not a surprise. IBM posted lower than expected earnings in the first quarter this year. The company announced in April that subsequent layoffs would be consolidated in the second quarter, rather than spread out through the year.

A July 17 Reuters report said the publicly traded corporation successfully beat second-quarter earnings estimates, but failed to boost its revenue.

Several information sessions for displaced workers and a job fair have been held in South Burlington for the company’s displaced workers. Noonan said in a press release Thursday that the Labor Department would hold additional job fairs “to connect laid-off workers with other employers.”

“We happen to live in a state where we are desperate for well-trained, technically skilled employees,” Shumlin said Wednesday. “Our employers are looking for the kind of employees that IBM has laid off. That’s the only good news here.”

The U.S. Department of Labor is now reviewing a petition by the state to investigate the layoffs under the federal Trade Adjustment Act.

If they’re found to have been caused by foreign trade, additional resources could be made available to the workers for job search assistance, income support, tax credits and special wage supplements.

Hilary Niles

Comments

  1. Walter Carpenter :

    “In a letter dated July 18, IBM appeared to have abandoned any concern about competitive harm that could come from disclosure of the layoff number.”

    It is a shame, but typical, how IBM, as with so many other corporations in this country, is more concerned with their bottom line than with their people and had to be prodded to do this.

  2. John Kemp :

    The figure is actually closer to 3300 people. http://ibmemployee.com/

  3. Ron Pulcer :

    According to Forbes article, IBM recently changed their 401K plan from semi-annual employer contributions to a single end of the year contribution.

    Does that mean the 419 employees in Vermont (and other laid-off IBM employees across the U.S.) will now NOT get anything as far as 401K employer contributions for 2013? Or, will it be pro-rated through July 12th? If not, then that was a very “convenient” policy change IBM made before a mass layoff.

    http://www.forbes.com/sites/edwardsiedle/2013/02/11/ibm-401k-participants-need-their-own-shadow-fiduciary-to-guard-retirement-benefits/

    • Terrence Sehr :

      Only employees who are eligible to retire, and do formally retire will receive their prorated 401k match, we employees were told at the time of the announced change.

  4. Wendy Wilton :

    IBM Essex is losing 419 out of 3,300 laid off nationally, or 13% of the layoff. Is IBM Essex 13% of IBM in the US? Don’t think so–more like 5% or less. A greater perecentage of the layoffs happened in VT, fewer in NY state where the company is preparing to implement new products and actively supporting a nantechnology center in Albany.

  5. Bonnie MacBrien :

    In response to Ms. Wilton’s comment –
    IBM has already decimated the NY facilities and therefore, has less to work with for getting rid of people. Please don’t ignore the facts: IBM Fishkill going from 12,000 to less than 5,000 (and you keep saying IBM Fishkill is growing!), IBM Poughkeepsie going from 14,000 to less than 5,000, IBM Kingston going from 5,000 to NONE. Add to that all the other facilities they have closed or severely reduced employees in the US – Boca Raton, Greencastle, Tucson, Boulder, San Jose, Endicott, Manassas just to name a few.
    It has absolutely NOTHING to do with anything the state of Vermont does or does not do. Good grief – please stop ignoring FACTS that don’t fit your preconceived notion and stop relying on “my friend who sat next to an IBM Fishkill employee on a flight and he said…”. IBM has been working on closing all its US manufacturing facilities to ultimately become strictly a service company since the mid 1990’s. It may give you comfort to think that the State of Vermont can do anything to change that, but that is a false comfort indeed.

Comments

*

Comment policy Privacy policy
Thanks for reporting an error with the story, "IBM layoffs pegged at 419"