IBM Lays Off Workers, Keeps Silent On Scope Of Cutbacks

Two days after reporting a 6 percent drop in fourth-quarter sales and a 12 percent increase in net income, IBM is laying off employees, although the company isn't disclosing the scope of the cutbacks or where they are occurring. Postings on a Web site for IBM employees indicated that the IBM Software Group was being particularly hard hit.

The cutbacks came the same day that Microsoft announced plans to eliminate some 5,000 positions, including the immediate layoff of 1,400 workers.

An IBM spokesman confirmed the company is "re-allocating our skills and resources" and notifying some employees in the U.S. that their jobs are being eliminated. But the company made no announcement of the layoffs and the spokesman declined to say in what IBM organizations or facilities the cuts were being made. Some of the laid-off workers might find openings elsewhere within the company, he said.

Layoff rumors have been circulating throughout IBM for weeks with Jan. 22 and 23 the most frequently cited dates for what is known within IBM as a "Resource Action." Alliance@IBM, a Web site operated by the Communications Workers of America union that has long tried to organize IBM employees, is rife with comments from IBM employees posted today who have been fired or "RA'ed."

"My team was just RA'ed from 8 people to 3," said one posting by a Software Group employee in Rochester, N.Y. "I was just whacked yesterday, [after being employed at IBM for] 29 years, 10 months," said another employee from IBM's Lexington, Mass., office, which houses the company's Rational development tools business. Another employee from that operation using the moniker "Still here" said "at least" 10 percent of the workers at the Lexington facility were cut.

Sources said CEO Sam Palmisano sent employees an e-mail Tuesday explaining the reasons for the layoffs. One posting on Alliance@IBM quoted the memo as saying: "Many companies today are curtailing or drastically cutting spending and investment, even in areas that are important to their future. We are taking a different approach, not only because we have the financial strength to do so, but because we choose to manage IBM for long-term success."

Postings indicated that layoffs have also taken place in the Software Group's Silicon Valley lab, its lab in Toronto and the Tivoli Netcool product group in Bedford, Mass. One posting said the group's DB2 database operation in Markham, Ontario, suffered an 8 percent cut, while another said: "WebSphere education team hit hard, RAs started going out today."

"IBM used to be [a] good place to work, not any longer," said one laid-off employee in the Silicon Valley lab. "Last few years, every time I think it can't get any worse, it would get a lot worse. Actually relieved that it's finally over."

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