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As IBM cuts in U.S., it hires in India
Report: Big Blue plans to bring on 14,000 Indian workers as it proceeds with U.S., European layoffs.
June 24, 2005: 7:35 AM EDT

NEW YORK (CNN/Money) - IBM is planning to hire more than 14,000 new workers in India this year, even as the company proceeds with layoffs of up to 13,000 workers in Europe and the United States, the New York Times reported Friday, citing an internal company document.

IBM (Research) Senior Vice President Robert Moffat, in an interview with the newspaper, said the move is not entirely about cost saving.

"People who say this is simply labor arbitrage don't get it. It's mostly about skills," Moffat was quoted as saying.

The buildup in IBM's labor force in India, Moffat told the Times, was attributable to surging demand for technology services in a thriving Indian economy and the opportunity to tap the many skilled Indian software engineers to work on projects around the world.

Lower trade barriers and cheaper telecommunications and computing ability help allow a distant labor force to work on technology projects, he said in the report.

"You are no longer competing just with the guy down the street, but also with people around the world," he told the Times.

Moffat told the newspaper that IBM is hiring people around the world, including many in the United States, in new businesses that the company has marked for growth, even as it trims elsewhere.

The company announced last month that it would cut 10,000 to 13,000 jobs, about a quarter of them in the United States and the bulk in Western Europe, the newspaper said.

Critics, however, contend that IBM is a leading example of the corporate strategy of shopping the globe for the cheapest labor in a single-minded pursuit of profits, to the detriment of wages, benefits and job security in the U.S. and in other developed countries, the report said.

Washington-based WashTech, a group that seeks to unionize such workers, gave the IBM document labeled "IBM Confidential" on Indian employment to the New York Times, the newspaper said.

According to the report, IBM's overall employment in the United States has held steady for the last few years, at about 130,000.

The newspaper said IBM declined to comment on the document or the numbers in it.  Top of page


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