Editor’s note: This article is by Tim McQuiston of Vermont Business Magazine, in which it was first published Feb. 26, 2014.
Wednesday was expected to be the day that IBM would cut workers, according to several local employees and national reports. But it appears that layoffs have been put off at least for now. Local workers did not want to be named but acknowledge that they expected layoffs, but do not know the scale. IBM globally has struggled with revenue growth in recent years and in order to maintain profits has shed expenses and even entire divisions. Last summer IBM laid off 419 workers in Vermont. This latest round of global layoffs has been expected since the beginning of the year.
This time around, IBM has already started its “resource actions” (employees call getting laid off “RA’d”) in Europe, Asia and South America, according to the IBM labor advocacy group alliance@IBM. Posts on the alliance@IBM website indicated the layoffs might have been delayed a day because IBM CEO Ginni Rometty was giving a major speech Wednesday.
An independent analyst, at Sanford C Bernstein & Co., said on Feb. 3 that layoffs worldwide could number at least 13,000 employees.
Vermont Business Magazine has requested comment from IBM.
According to a statement from New York Governor Andrew Cuomo Monday, the state and IBM have reached an agreement whereby by IBM would retain at least 3,100 workers through 2016 in New York. It cut 697 workers in the East Fishkill-area last year. IBM no longer provides employment numbers, but Bloomberg reported that it had about 8,000 in that region south of Albany in 2012.
The Cuomo announcement essentially confirms that layoffs are imminent and that there is a limit set for New York.
IBM is based in Armonk, N.Y. It has wanted to sell its technology division, which includes the Essex, Vermont, chip plant, as part of its shedding of legacy hardware divisions that are not as profitable as its business services components. Earlier this year, it sold its “low-end” server division for $2.3 billion to Lenovo, a Chinese company.
Vermont workers speculate that IBM would like to sell its chip making plants, including the one in Essex and another in East Fishkill, N.Y, to GlobalFoundries, based in Santa Clara, California, which recently opened up a chip plant in the Albany area. According to Bloomberg, however, IBM has been unable to find a buyer.
The Alliance@IBM worker advocacy group has posted comments on its Web site suggesting that a school vacation week would be an inconvenient time to institute a large layoff as so many workers are off. Another post stated Wednesday: “The way I see it is if IBM called off or delayed the RAs it was not because of information the Alliance obtained; it was because the Alliance got the word out to the public and IBM backpedaled to save some face. If it wasn’t for the Alliance then IBM would have no impediments or even a threat of fear and would do anything it wants, when it wants.”
