IBM's Unannounced Layoffs Near 5,000 Mark

The company has issued no overarching public statement on the extent of the layoffs, saying only that some plants are autonomously cutting their workforces and consolidating operations.

Where IBM has been silent, a former employee at IBM's Endicott, N.Y., plant has filled the gap, fielding calls and e-mail from employees who've been sacked and piecing together a nationwide picture of the layoffs.

"People are getting very upset that the company isn't being honest about the extent and numbers of job cuts," says Lee Conrad, who now heads the AllianceIBM, a division of the Communications Workers of America union that is attempting to organize IBM employees. "We seem to be the only ones that have the numbers and are giving them out."

Information from within the company, retrieved by Conrad and others, points to 1,000 layoffs in IBM's server division, 700 in its software group, 100 in its global financing unit, 360 at corporate headquarters, 300 in its storage division and more than 2,000 in the company's largest single unit, IBM Global Services.

The job cuts appear to be spread among IBM's 150,000 U.S. employees in locations across the United States.

The AllianceIBM Web site lists layoffs at IBM plants in Burlington, Vt.; Dallas and Austin, Texas; Southbury, Conn.; Charlotte and Raleigh, N.C.; Rochester, Minn.; East Fishkill and Poughkeepsie, N.Y.; Boulder, Colo.; San Jose, Calif.; Beaverton, Ore. and elsewhere.

IBM spokeswoman Laura Keeton characterized the job cuts as an effort at "skills rebalancing and elimination of redundancies."

Keeton noted that some of the divisions involved in layoffs are also seeking new employees. One of them, the software group, counts more workers than it employed last year, despite laying off 700, Keeton says.

The 2,000 job cuts in IBM Global Services were "part of the natural ebb and flow of the services business" with layoffs a regular part of the outfit's temporary work contracts, she says.

Layoff fears were fueled by IBM's first-quarter earnings report--its worst performance in more than a decade--and subsequent hints by CEO Samuel Palmisano that IBM would trim its 320,000-strong work force.

At IBM's annual spring analysts meeting in New York last month, Palmisano did not dispute a Wall Street analyst's prediction that the company would seek to follow its 6 percent drop in quarterly revenue with a 6 percent cut in jobs--equivalent to 20,000 employees.

Palmisano suggested that the work force could be reduced by 15,000 this year, simply through normal attrition.

He said the company would look to cut $1 billion to $2 billion in costs, and would seek "parts of the business to be much more effective in, from a cost perspective." He named "people" as one area.

IBM shares were down $1.80, to $80.45, in Friday trading on the New York Stock Exchange.

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