graphic
graphic  
graphic
News > Technology
graphic
IBM starts job cuts
First round of cuts focuses on server division, but more are expected; magnitude of cuts unclear.
May 23, 2002: 4:21 PM EDT
By Richard Richtmyer, CNN/Money Staff Writer

NEW YORK (CNN/Money) - IBM Thursday began quietly laying off employees at its facilities across the United States, confirming rumors that have been swirling amid the tech titan's ranks for weeks.

Most of the cuts this week are taking place in the company's server division, IBM spokeswoman Carol Makovich said. She refused to provide specific numbers or name specific locations that were affected.

graphic
graphic graphic
graphic
Lee Conrad, national coordinator for the Alliance@IBM, an affiliate of the Communications Workers of America representing about 4,000 IBM employees, said an IBM executive told employees within the server division Thursday that 1,000 jobs would be cut.

So far, Conrad said he has confirmed cuts in three locations: 224 job cuts at IBM's server group based in Endicott, N.Y.; 150 cuts at the server division in Rochester, Minn.; and 144 cuts at the server division's operations in Poughkeepsie, N.Y.

Job cuts were widely expected, and the company's new CEO, Samuel Palmisano, hinted that layoffs would be happening when he met with analysts on Wall Street last week.

During the meeting, Palmisano suggested that IBM's (IBM: up $0.35 to $84.35, Research, Estimates) work force could be reduced by 15,000 this year just through normal attrition if it were to put a freeze on hiring.

When asked directly why investors should not expect as many as 20,000 job reductions given IBM's recent declines in revenue, Palmisano called it an "excellent question," and called such analysis "absolutely appropriate, from a macro level."

However, determining the magnitude of the cuts could prove difficult, given IBM's track record. The company historically has been known for making "stealth layoffs," referring to small job cuts across a range of departments, which keeps it out of the public eye.

"It's sad that it has come to this," said Conrad.

"Not only the press, but also the communities and the workers can't get a straight answer out of the company they work for," Conrad added. "It benefits IBM because they know the truth, and they know that it's hard for others to get the full impact of this, so they just play this game with everybody."

Conrad said he also was hearing reports of scattered job cuts of fewer than 100 employees from various other divisions throughout the company, as well as about 175 cuts coming out of the company's data-storage systems unit in San Jose, Calif.

Meanwhile, employees in IBM's Global Services division are bracing for a round of layoffs expected to begin there next week.

IBM, the world's largest supplier of computer hardware and information technology services, employs more than 319,000 people, roughly 160,000 of which are based in the United States.  Top of page






  graphic

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.