Union says IBM may cut 4,000 U.S. jobs, shift work to India

The layoffs would be IBM's largest single workforce reduction thus far this year

IBM may be getting set to make its largest single workforce reduction thus far this year, according to the Alliance@IBM employee union, which says it has heard that the cutbacks will affect about 4,000 U.S. workers at IBM's Global Business Services unit.

Lee Conrad, the union's national coordinator, said he has been told by IBM employees that the expected job cuts may take place as early as Thursday. That day already has been dubbed "Black Thursday" in one anonymous post on a message board on Alliance@IBM's Web site.

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The expected cuts were first reported by The Wall Street Journal, which cited anonymous sources at IBM in a story saying that the company plans to eliminate "a large number" of U.S. jobs at the Global Business Services division and shift more of its work to facilities in India. An IBM spokesman contacted by Computerworld today said that the company doesn't comment on "rumor or speculation."

Conrad said he can't be certain about the size of the latest cutback until IBM actually begins letting workers go. But like the Journal, he added, Alliance@IBM has heard that "big numbers" will be involved and that what may be driving the cuts is "the offshoring of U.S. jobs to India" and the Asia Pacific region.

IBM's U.S. workforce has been shrinking, while its overseas head count has been on the increase. The number of IBM workers in the U.S. dropped from 121,000 to 115,000 during the course of 2008; however, its overall employee count grew by 13,000 people last year. And already this year, the company has cut more than 4,600 jobs in the U.S. and Canada, according to earlier counts by Alliance@IBM.

The union -- a Communications Workers of America local that doesn't have enough members to gain official recognition as a bargaining unit -- has been the source of most of the information about the recent job cuts made by IBM. The company has confirmed that reductions were made, but it hasn't publicly announced them or said how many workers were affected. In addition, it has refrained from describing the earlier cuts as layoffs, instead saying that they were part of "an ongoing process that we do throughout the year to match skills and resources with our client needs."

IBM and other companies aren't required to notify government officials of layoffs unless the cutbacks reach a threshold set in the Worker Adjustment and Retraining Notification Act, also known as the WARN Act. The provisions of that law apply when there are 500 or more layoffs at one location. But at IBM, job cuts can be scattered among different facilities in the U.S. and other countries.

Mark Loughridge, IBM's chief financial officer, indicated that some restructuring was underway at the company during a January conference call about its fourth-quarter financial results. In Loughridge's prepared remarks, he said that IBM "will continue our focus on structural changes that reduce our spending levels and improve productivity in 2009."

The message board on the Alliance@IBM Web site lets people post anonymously, so it's hard to gauge the authenticity of comments - but they're often detailed, and they use acronyms that are familiar to IBM employees. In one post today, an anonymous poster wrote: "My manager has not said anything to me yet but I am already preparing myself for the news."

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This story, "Union says IBM may cut 4,000 U.S. jobs, shift work to India" was originally published by Computerworld.