IBM’s American Job Cuts Have Now Begun


International Business Machines Corp. (NYSE:IBM) has begun job cuts as a part of a plan to reduce its workforce the company announced in April after disappointing first quarter earnings.

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IBM faced its first earnings shortfall since 2005 after the company made profits of $3 a share in the first quarter, down from the $3.05 predicted by analysts. At that time IBM said the layoffs would be focused overseas and be finished by the end of June, but it has been reported that layoffs have begun within the U.S. as well. Analysts have estimated that the company will cut between 6,000 and 8,000 jobs globally and from a variety of positions. The company plans to lay off executives as well as factory employees at varying levels of seniority, according to a person familiar with the matter.

The world’s biggest provider of computer services released a statement about the layoffs. “Change is constant in the technology industry and transformation is an essential feature of our business model,” IBM said Wednesday, without giving specifics on the job cuts. “Consequently, some level of workforce remix is a constant requirement for our business. Given the competitive nature of our industry, we do not publicly discuss the details of staffing plans.”

IBM’s plant in Essex Junction, Vermont, has reportedly begun letting employees go. IBM doesn’t release data on employment, so it is currently unknown how many employees in Vermont and elsewhere the company is planning to cut. The governor of Vermont Peter Shumlin released a statement about the layoffs, saying, “Our hearts go out to the affected workers and their families, and I pledge my administration’s resources to help their transition. Vermont’s partnership with IBM is very important, but our state is not immune to the forces that are driving this decision in the larger organization. IBM has assured us that it remains committed to Vermont.”

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One Essex Junction employee, a member of the employee and retiree group Alliance@IBM, commented on the layoffs. “They cut some managers and jobs yesterday in Burlington. And then last night some people on my work shift were called into office and let go,” said Earl Mongeon, who works the night shift on the manufacturing line.

It’s likely that more information will come out of other IBM plants in the U.S. as the layoffs continue.

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