IBM Restructures, Cuts Estimated 13,000 Jobs


The multinational technology and consulting corporation IBM implemented Thursday some corporate restructuring and in the process cuts an estimated 13,000 jobs from the payroll. According to employee watchdog Alliance@IBM, workers were laid off in IBM’s offices and plants in Massachusetts, Vermont, Iowa, Arizona, North Carolina, Missouri, Oklahoma, Minnesota and New York. Determining the exact scope of the job cuts proved difficult as IBM stopped providing information on the actual number of employees affected in each state.

In defending its decision about the recent layoffs, IBM said this move is “rebalancing” investment in new technologies with the employees needed. According to Douglas Shelton, IBM spokesman, “IBM continues to rebalance its workforce to meet the changing requirements of its clients, and to pioneer new, high value segments of the IT industry.”

Shelton added that IBM has plans to take a lead role in developing cloud computing, cognitive computing as well as in analytics. This new direction will require a $1 billion investment in its new Watson unit and another investment outlay of around $1.2 billion to expand its cloud operations worldwide.

However, the layoffs did not seem to hit all the states in the same serious extent. New York for example appears to have less job cuts compared to the other states. Analysts say that this could be attributed to some local officials trying to make a deal with IBM.

According to the CEO of the Albany’s College of Nanoscale Science and Engineering Alain Kaloyeros, New York earlier this week signed an agreement with IBM to add more jobs in Buffalo as well as maintain around 3,100 high-tech positions in the Hudson Valley. “New York is the only state that did not experience any layoffs and actually has added 500 new jobs in Buffalo as part of the partnership with IBM.” added Kaloyeros. Gov. Andrew Cuomo (D) announced earlier this week his commitment to maintain 3,100 high-tech jobs in the Hudson Valley area.

On a deal announced Monday, Gov. Cuomo said the state will invest $55 million in Buffalo in order to build a technology center with IBM as its first tenant where IBM is expected to hire around 500 workers. Based on Cuomo’s press release statement, IBM will maintain 2,350 jobs in its semiconductor plants located in Dutchess County, Albany and Yorktown Heights.

However, the protective effect of this agreement with regard to the case of New York is not guaranteed. According to Shelton, “If there are IBMers based in N.Y. telling you they have been notified today [about the job cuts], you should trust them.”

The Burlington Free Press in Vermont meanwhile reported that around 140 employees were laid off. This figure was verified by Gov. Peter Shumin (D) whose current figure is one-third of last year’s job cuts totaling to 419 employees.

Kieran Lalor (R), an Assemblyman from Dutchess County criticized IBM’s lack of transparency with regard to this issue. He said that school districts and counties often allow IBM the benefit of paying lower property taxes as a return gesture for the commitment of IBM in the creation and maintenance of local jobs, it is like subsidizing the operation of IBM. However, with the way IBM is holding back on information these days, people have no way of knowing whether IBM did its part on the employment aspect or if the tax cuts really worked and helped IBM, added Lalor.

According to Jim Coughlan, a comptroller of Dutchess County, IBM as a company may have established a long relationship with New York as well as in other small towns across the U.S. but ever since IBM went global, the company’s relationship with these places slowly decreased. And this happened despite the hundreds of dollars extended to IBM in the form of local tax breaks.

The implementation of its corporate restructuring and in the process cutting an estimated 13,000 jobs, IBM has left many confused on the real issue and the real situation with the company.

By Roberto I. Belda


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