IBM Cuts 1,400 Jobs One Day After Promising To 'Invest in Our People'

If a contest were held to determine the most hypocritical behavior by a U.S. corporation, IBM and CEO Sam Palmisano would probably win top prize.   

In January, one day after Palmisano told employees that the company "would invest in our people" and not resort to job cuts, IBM terminated 1,400 employees from its U.S. based sales and distribution division. No official announcement of the layoffs was made, and over the past two months, IBM has been continuing its "stealth" job cut campaign.  

IBM has been quietly reducing the size of its U.S. workforce while increasing overseas hiring. Total global employment at IBM from 2007 to 2008 grew by 12,000 (to 398,000), but the company's U.S. workforce has shrunk by more than 11,000 during the same period, dropping to 115,000.

Yet IBM is hoping for a multi-billion dollar handout from the federal economic recovery program.

"We're outraged that IBM has its hand out for taxpayer-supplied stimulus money at same time that it's cutting U.S. jobs and shifting more of its workforce overseas," says Lee Conrad, national coordinator for Alliance@IBM/CWA Local 1701. The Alliance, which has been tracking the cutbacks based on reports from workers and other sources, estimates that the company will cut the jobs of as many as 10,000 workers this spring.

IBM has been careful not to terminate more than 499 workers at any one location, which would trigger a federally-mandated 60-day notice to employees under the WARN Act.

The company posted strong profits for the last quarter of 2008 and has hired some 51,000 workers worldwide this year alone, the Alliance said. Just 3,500 of those jobs were in the United States; more than 90 percent of the 48,000 workers that IBM has hired overseas are in the poorest, lowest-wage countries, led by India, with 19,000 workers.

In another display of hypocrisy, IBM sought to blunt criticism of outsourcing so many jobs by offering to pay expenses for displaced IBM workers in the United States who move to India and other developing countries where IBM is hiring. "In exchange for agreeing to work for the company in India," says Conrad, "they would have to work at the prevailing wage in India."

Laid off IBM employees are angry, Conrad said. "Many long-time employees are now telling us that their last job at the company is training their foreign-based replacement."

Alliance@IBM is the sole source for tracking the company's U.S. job cuts, relying on reports from IBMers around the country. CWA also is working with members of Congress on legislation requiring companies to be transparent about job cuts and offshoring. For more information on the campaign, go to www.allianceibm.org.