IBM To Slice More Jobs In Chip Group

In a memo e-mailed to employees Monday by Senior Vice President John Kelly, the IBM Technology Group is also mandating one week off without pay for some employees.

An IBM spokesman verified the contents of the memo and said the bulk of the jobs cut--500--will come out of IBM's Essex Junction, Vt., fabrication facility. The remainder will come out of other sites, including Raleigh, N.C.; Waltham, Mass.; Austin, Texas; and Rochester, Minn. Employees at IBM's state-of-the-art Fishkill, N.Y., facility will not be affected this go-round, the spokesman said.

The mandatory furlough will apply to many employees, including high-ranking executives. The layoffs will affect mostly professional and managerial workers. A few weeks ago, the group cut back on its overtime schedules at the Vermont facility.

In the e-mail, Kelly said the company would flatten its management structure.

"As our second-quarter results showed, we continue to face a tough industry environment. Although we've had a number of key customer wins recently, there was a lag time to when they will begin producing revenue and we face uneven customer demand and continued competitive pressures," Kelly wrote.

IBM is one of the largest employers in the state of Vermont, with about 7,000 workers there. The state has long been concerned about losing many of those chip-making jobs to the more modern facility in Fishkill.