IBM Begins Handing out U.S. Pink Slips in $1B Layoff

As expected, IBM (IBM) began laying off employees in Iowa, New York, Minnesota, Missouri, North Carolina, Oklahoma, and Vermont Feb. 27, adding to cuts the vendor earlier enacted in Arizona, according to the employee union Alliance@IBM.

According to the union, workers were fired Thursday at IBM locations in Endicott and Poughkeepsie, N.Y.; Burlington, Vt.; Rochester, Minn.; Dubuque, Iowa; Columbia, Mo.; Tulsa, Okla.; and the Raleigh, N.C., area, with more layoffs still to come. The exact count of how many employees have been furloughed to this point is still unclear.

Prior to the U.S. firings, IBM already has been axing employees at some facilities in Asia, Europe and South America, issuing pink slips to workers in the United Kingdom in its Systems and Technology, Technical Support Services and Financial Services groups, and all 100 people on its Power systems and storage teams in Taiwan, according to the union.

The employee group has kept a running headcount of the layoffs and, based on reports from workers and affiliated unions in Europe, to date it believes IBM has cut 600 jobs in Argentina, 105 in Belgium, 1,500 in Brazil, 480 in France, 430 in Italy, 240 in the Netherlands and 35 in Norway.

Analysts have estimated the vendor could fire as many as 15,000 workers worldwide. The layoffs are part of a $1 billion “workforce rebalancing” initiative IBM announced in late January following a poor Q4 2013 financial report.

As expected, the layoffs have demoralized both employees cut and those keeping their jobs, based on postings at the union’s online forum. Workers are reporting that IBM has offered a severance package of one week’s pay for every six months worked as measured from the most recent date of hire.

“So, we have 400k employees, mainly demoralised, few incentivised,” wrote one laid off employee on the Alliance@IBM forum. “Are they working at 60% capacity? Who knows. But firing 4% and neutering 96% looks about as much a strategy as chasing $20 [EPS target] in 2015…Smart people are released to places where they can make a greater economic impact. I don’t mean to belittle the experience of individual employees, but trust me, as IBM declines, innovative new businesses grow.”

In the absence of IBM providing figures for the number of employees involved in this layoff, it may be difficult for the union to make an accurate count. IBM’s practice with layoffs previously has been to provide the terminated worker with a packet of information that not only includes the severance package and health and retirement benefits but also the number of employees losing their jobs in the staffer’s business unit. However, in this go-round, IBM has declined to provide the layoff information to fired workers, citing privacy concerns.

“We’re outraged,” Lee Conrad, Alliance@IBM national coordinator, told the Raleigh, N.C., News Observer. “They’re trying to stop any kind of information on these job cuts … getting out,” he said.