IBM has announced another round of layoffs at the company’s facility in Essex Junction as part of a global reorganization.
The exact number of Vermont workers to be laid off is not clear. IBM, presumed to be the largest private employer in the state with more than 4,000 employees, stopped releasing data on employee numbers in 2010.
The Alliance@IBM, a website of the IBM employees union CWA Local 1701, reports on Thursday morning that 1631 jobs have been cut from the 20 different work groups — but those layoffs are not restricted to Vermont. Job cuts are being reported on the Alliance website from Ohio, Chicago, Massachusetts, Canada and other sites, including Vermont.
Jobs have been cut in the systems technology, global business services and software groups, according to Alliance national coordinator Lee Conrad. But he expects to hear of other affected groups throughout the day.
Citing competitive reasons, IBM spokesperson Jeff Couture said the company does not publicly discuss the details of its staffing plans. The company reported lower-than-expected quarterly earnings in April.
“IBM keeps this between IBM and their employees,” said Lawrence Miller, secretary of the Agency of Commerce and Community Development. He said the number of layoffs apparently is not enough to trigger the federal WARN Act.
The WARN Act requires companies with more than 100 employees to give at least 60 days notice of a layoff before taking any of the following actions: closing a facility of 50 or more workers, discontinuing an operating unit of 50 or more workers, laying off 50 to 499 workers (if those layoffs comprise one-third of the total work force at a single employment site), or laying off 500 or more workers at a single site.
Annie Noonan, commissioner of the Vermont Department of Labor, said she was advised of the layoffs this morning through the governor’s office. Noonan said she was not aware of whether employees were being given notice before being instructed not to return to work.
Gov. Peter Shumlin’s press secretary released a statement Wednesday morning about the announced layoffs: “Our hearts go out to the affected workers and their families, and I pledge my administration’s resources to help their transition,” he said. “Vermont’s partnership with IBM is very important, but our state is not immune to the forces that are driving this decision in the larger organization. IBM has assured us that it remains committed to Vermont.”
Earl Mongeon works the night shift on the manufacturing line at the facility near Burlington. “They cut some managers and jobs yesterday in Burlington. And then last night some people on my work shift were called into office and let go,” he said.
State response
Miller stressed that the state’s exclusive focus is to support the individuals affected by the cuts, “however many people it is.” Unfortunately, the state had plenty of practice responding to layoffs through the “Great Recession,” Miller said.
Noonan said the state’s unemployment claims staff is “on high alert,” with cross-trained staff ready to help handle a higher volume of calls.
Even more critical, she said, is the workforce development division’s Rapid Response Team. Experts from the agency give presentations to laid-off workers, either on location or near the employment site, to apprise them of their options for unemployment compensation, dislocated worker benefits and opportunities for retraining and work placement.
IBM does not appear in Vermont Joblink’s database of WARN layoffs, which dates back to 2003. The company reportedly employed as many as 8,000 workers at the Essex Junction plant more than a decade ago. Several rounds of layoffs, including a significant cut in 2009 and another in 2010, chipped away at its ranks.
State officials remain optimistic.
“We expect the Essex Junction facility will be part of Vermont’s economy for a long time,” Miller said.
Noonan was similarly hopeful about both IBM’s commitment to Vermont and the laid-off employees’ prospects for new job placement.
Couture declined to discuss specific plans for the company’s investment in Vermont. A prepared statement reads, “IBM is investing in growth areas for the future: Big Data, cloud computing, social business and the growing mobile computing opportunity.”
Couture added that the Essex Junction facility’s product offerings remain strong, the microchips produced there being geared toward mobile, wireless and networking technology, including smartphones. “They’re aimed at high-value market segments of the industry,” he said, pointing out that many of the world’s largest consumer electronics brands use chip technology produced in Vermont.
Noonan said this specialty leaves laid-off workers with valuable skills, “The IBM workforce, which is a very highly respected and well trained workforce, will be highly attractive to many employers,” Noonan said.
The Labor and Commerce departments conduct a daily “job inventory” with companies to assess new job openings and recruitment issues. Noonan said her agency does have an inventory of job vacancies, and that their counselors work one-on-one to match people to openings.
Sagging morale
Morale is not so high among employees, however — both those laid off and those who will remain at the plant for now. Mongeon described a long process of attrition. He’s been with the company for 35 years, and works with the Alliance as a union organizer.
“It’s like the bully at the schoolyard,” Mongeon said. “He comes one day and takes your lunch money, he comes the next day and takes your lunch, he comes the next and takes something else.”
Mongeon said his pension was frozen in 2008, and last December the company announced that it no longer would be matching employees’ retirement savings contributions on a monthly basis.
“They will still match it, but they won’t contribute anything till the end of the year,” he said. “So in the meantime, you don’t get any market gain from the money you would be earning in your 401(k) if they were matching monthly.”
Mongeon assumes that workers laid off during the year will not receive a pro-rated retirement contribution upon their departure, but that could not be confirmed or denied with IBM.
“There’s really not a future for people who want to build a career there,” he said.
This article was updated at 10:02 a.m. Thursday, June 13, 2013.
This article was updated at 6:03 p.m. Thursday, June 13, 2013.
