IBM to announce layoffs and shift some jobs to India – WSJ
SOURCE: WSJ
DATE: March 25th, 2009
According to WSJ , IBM is planning to announce layoffs in their global services unit and shift some roles to India. IBM ss not the only large services firms which are restructuring their US operations. Accenture has done the same and is downsizing their US staff to deal with the reduced demand for the service. Other firms like Deloitte, KPMG have primarily scaled down their advisory businesses in the US too.
IBM does not provide a breakup of their employees in countries outside of India but this is from an earlier report this year.
The number of workers that IBM employs in the U.S. declined by about 5% last year, but the company’s overall head count is increasing because of overseas hiring.
IBM finished 2008 with 115,000 U.S. employees, down from the 121,000 it reported at the end of 2007, according to its most recent annual report released this month. Overall, IBM finished 2008 with 398,455 employees worldwide, an increase of nearly 12,000, or about 3%.
In 2007, IBM said it had 98,000 employees in Brazil, China, India and Russia, but that number increased by 15% to 113,000 last year. Most of those employees are in India.
IBM continues to cite the U.S. as the country with its largest workforce, but it is not providing a breakout of head count for India, which may well be the second-largest country for employment. In 2007, IBM said it had 74,000 workers in India.
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International Business Machines Corp. is expected to inform a large number of U.S. employees in its global-business services unit that their jobs are being eliminated, with the work of many of them being transferred to IBM employees in India, according to people familiar with the situation.
The planned cuts show that even companies that are successfully navigating the global recession are continuing to slash costs–some of them by taking advantage of cheaper Asian labor.
IBM reported $4.42 billion in fourth-quarter earnings, a 12% gain. It has forecast profit growth this year, and is discussing a takeover of rival Sun Microsystems Corp. for $6.5 billion to $8 billion, say people familiar with the talks.
Among other companies that are profitable, Microsoft Corp. announced plans for 5,000 layoffs earlier this year and Caterpillar Inc. said it was cutting 5,000 white collar jobs by the end of this month in the wake of a fourth-quarter earnings decline.
It couldn’t be determined how many people are losing their jobs in the IBM action. IBM typically avoids public disclosure of layoffs, and a spokesman declined comment on the plan.
IBM managers have been receiving training from human-resources specialists on handling the layoffs, according to one manager involved in the process. Earlier this year, IBM sent notices of layoffs–often characterized internally as “resource actions”–to around 4,600 employees in its software, sales, semiconductor and finance groups, documents sent to employees in those departments show.
The global business services group is by far the largest at IBM in revenue and employment, with 180,000 professionals world-wide, according to an internal document viewed by The Wall Street Journal.
According to its annual report, IBM had 398,500 workers world-wide at the end of 2008, up from 386,558 at the end of 2007. However, U.S. employment has been steadily dropping, reaching 115,000 at year end, down from 121,000 at the end of 2007.
Write to William M. Bulkeley at bill.bulkeley@wsj.com
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