IBM Layoffs Having Dramatic Effects Across North America

    June 12, 2013
    Chris Richardson
    Comments are off for this post.

IBM has initiated another round of layoffs, and while the national story is concerned with the total number of employees dismissed–anywhere from 6000 to 8000 employees, according to some estimations–if you take a closer look at the towns and cities affected, the story has much more impact. News organizations covering the areas where IBM employees entered unemployment present a much different picture when compared to the simple “statistical casualties of the economy” approach. The local reaction offers a personal look at how these layoffs, which are done to improve a company’s bottom line.

In New York’s Westchester and Dutchess Counties, IBM’s clean sweep affected more than 700 people. In Ottawa, Canada, another 200 IBM employees were shown the door. Understandably, the word “overjoyed” would not be used to describe the tone:

CTV Ottawa reporter John Hua has been talking to employees who say the mood inside the campus is “gloomy”. Employees told Hua that up to 20 per cent of the Ottawa staff have received layoff notices. Some have been employed with IBM/Cognos in the capital for more than 30 years.

Meanwhile, the state of Vermont is waiting to hear how many IBM employees added to that state’s unemployment list:

Gov. Peter Shumlin said in a statement released by his office, “We heard from IBM today that sites around the United States, including the Essex facility, will be notified of a workforce reorganization that will result in layoffs. I am always concerned when we learn that Vermonters face job losses.”

Of course, if someone was talented to get a job working for IBM, it stands to reason they have acquired enough skills to be effective at other stops in the technology industry. That being said, most people like to make such decisions voluntarily, not because they were caught in a “workforce remix” whirlwind. Furthermore, if you are one of the employees who was laid off after 30 years of service, changing careers probably didn’t sound like the best idea, at least before the layoffs were announced.

Thanks to the significant national attention that comes whenever a company like IBM cuts its workforce, many of the local governments for the areas involved are announcing the establishment of programs to assist those who were shown the door.

Courtesies here, here, and here.

  • Gad Israel

    Good for you IBM you don’t want to make the same mistake like Microsoft did where they will hold you hostage they make money but the company plus some of the imported employees are not qualified for IT jobs anyway

    • tarfu

      please translate into English

  • don mitchell

    I am currently an I.T consultant contracted to IBM, and have been numerous times in the past on various projects, and from my experience it seems that if IBM would stop hiring all these Off-Shore people (contract and full time)it could keep most of its AMERICAN workforce.

    • Pat

      I’ve been an IBM contract consultant on multiple IBM projects over the past 13 years and I’ve been LAID OFF 5 times by Big Blue, most recently in May 2013.. Yes, I’ve learned a lot at IBM and I haven’t had any problems landing on my feet. However I have to agree that if they would stop outsourcing our US Based jobs to India and now China, IBM could retain it’s solid stable US workforce! Personally, I’m tired of training people in another country to do my job!

      • Michelle

        You forgot to mention the Philippines..there are call centers in the Philippines that take on IBM accounts

  • Macinac

    don mitchell — Remember that IBM is a global company. The foreign workers can be trained here and redeployed back home, thus strengthening the foreign location. This strategy goes back decades.

    • Pat

      Problem is they aren’t trained here!! We, the US workforce have to train these people via web conference, emails, IM’s and conference calls in India and China, and several other countries, to take our jobs. It’s happened to me 3 times at IBM.. Now it’s China who is getting our jobs!!

    • T

      Macinac. Comment on topics you know something about. 90% of foreign workers outside the US are working for locations that are not in their native country. Over 60% are corporations owned in the US. I have many contacts there and discuss business with them regularily. This is not good for the US economy.

    • The Dude

      If you think that this is a good strategy for this country, you’d better stock up on ammo and razor wire, because things will get ugly.

  • tj

    It is time Obama stepped up and stopped this insanity. In fact, this subject of outsourcing American jobs was part of his platform that he has done nothing about.
    Outsourcing American jobs falls on the shoulders of Corporations and thier greed.

    • j dauerty

      I assume that TJ has 0 business experience, or is naïve at a level previously unknown to me.

      IBM and other multi-national companies do what is necessary to compete in the world marketplace.

      The msm invariably fails to mention this imperative when they report (propagandize) on the evil capitalists, and their cold hearted treatment of their employees.

      We had a perfect example of this in the 2010 California mid-term Senatorial race between incumbent Barbara Boxer and former HP CEO Carly Fiorina. Boxer, who was best known for interrupting a high ranking military officer, and chastising him for calling her
      maam or Madam instead of (SENATOR) during some well publicized Senate hearings.

      Fiorina, who was (is), a courageous, and eminently qualified candidate was viciously attacked by the liberal California press, for exporting some HP jobs during her term as HP CEO.

      What the press failed to mention (as always), was what the likely consequences would have been had she not maintained the cost competiveness of HP products by exporting some jobs.

      Largely thanks to the negative coverage by the press, and huge contributions by the state employee unions. MS. Boxer won by a comfortable margin, and California’s voters chose mediocrity over qualifications and integrity

      • supertech86

        the heaviest trading partners of the US are Canada and Mexico. Generally country’s buy goods and services from neighbors. there’s not much that country’s in the EU can’t get around the corner, they have no need to go to the US for much in the form of goods and services.

        of the 14T US economy only about 3T of it is from actual “trade”.

        US firms were too heavily invested in the financial sector and many have not recovered from the losses that occurred when the housing market crashed. almost the entire increase in the stock indexes during the 2000’s were from US large firms investments in mortgage backed securities, etc. it’s exactly why the FED secretly handed out another 16T in interest free loans to US large firms in 2009 after they had received those TARP monies.

      • Kris

        IBM is a grand hyppocrite, they have been outsourcing jobs to China, India and Brazil for years. SCUM American company.

      • The Dude

        Wake up, tool. We Californians hear far too much of this kind of gibberish when companies are slapped down for egregious practices like polluting the environment or treating employees like chattel. The “do what is necessary to compete in the world marketplace” is just code for “let us do whatever we want” without regard for the lives of our fellow citizens.

        If companies like IBM spent more time and energy innovating and creating high-quality services and less time pandering to the quarterly demands of their shareholders and trying to game the system, they wouldn’t need to push for special access and handouts from the US government. They could also stop pushing through legislation to increase H1 Visas as they lay off Americans.

      • Vijay Patel

        Mr Dauerty,

        I am surprised you consider Carley as a qualified candidate for anything. She is the one who became a leader of a well run innovative company and ran it a ground. She is was a terrible CEO. I am glad she is not holding any position in the government.

    • supertech86

      those that own the means of production dictate policy in a republic with a capitalist-like economy. they always have.

      NAFTA, GAT, etc. is all policy that came from the Trilateral Commission in the 70’s.

      globalization is a scam and the US is the biggest participant. we offshore 6x the amount of jobs as the EU15 combined. but if you check the data at the OECD website you would find that US workers are the LEAST protected in the OECD. it costs nothing to reduce workforces in the US because we have the 3rd lowest union density rate in the OECD.

    • brian landon

      so you are prepared to pay 5 or 6 times the amount you paid for the very computer or mobile phone you are working on??
      Look at Apple!!!

      Perhaps if labour costs weren’t so-union-centric the real costs would have gone down long ago, but paying someone on an assembly line to put in screws for $40 an hour –those days are long gone

      and if companies like IBM were not profitable, they’d pay less in taxes and that would be less money to prop up the massive government machine built under Obama—

  • Gary V

    Is this a surprise? When’s the last time anyone here bought an IBM product? I used to work in IT for a huge company. I rarely heard about any new purchases from IBM.

    • T

      IBM is a service company for a majority of their revenue. Software and services is their revenue stream. This was started back when Gerstner realized they could not compete with foreign competition on hardware and the service industry was much more profitable. He trashed the R&D and layed off most of the scientists.

    • Tom

      Gary V, IBM is huge in services, cloud, and shared storage as well as Mainframes. Just because they don’t make pc’s,printers anymore doesn’t mean that they aren’t one of the leaders of IT .

      • tarfu

        Cloud.???? not so much

    • Seth

      Just because you don’t see them doesn’t mean you aren’t using their products. For example there are about 9 chips in the Galaxy S4 made by IBM and 6 in the iPhone5.

  • Concerned

    This from a company that lost a $600M cloud bid to Amazon, whined, had the bid reopened, and may get it. Once they do, the only workers that will be on it will be from India, China, Russia. Yes, this is really who we want working on our CIA clouds.

  • Mike

    it should be “Effects”, not “Affects” in the title.

    • Lyn

      No “Effects” is correct.

  • John

    no surprise, as an ex-employee, or IBMer, I bet this is an excellent excuse to outsource to other countries. IBM will tell public: don’t blame me, go blame walls street. Year by year, middle class gets shrieked. where is future?

  • Lou Vignates

    Years ago I worked for IBM when it treated its employees as human beings. That all changed with Gerstner.

  • Bern B

    I am saddened to hear of the layoffs. Still a great company. Worked there for 13 years in both E. Fishkill and Atlanta, with E. Fishkill being the better experience. It is the manufacturing workers who make the difference in IBM; not the hot shot big wigs in corporate offices like in Atlanta, where managers took care of friends and their college buddies. Overall, though, still a great company and I am never going to bash them.

  • Richard

    Working at IBM doesn’t really give you skills to work anywhere except IBM. Analysts often say hire an IBM’r after they’ve worked at another company first.

    The workplace is toxic and doesn’t really reflect how other companies really operate. These layoffs are going to hurt all but the best employees who got their real training at another company.

  • JR

    No surprise here! I worked at PwC Consulting when IBM bought the consulting group in 2002 and it was a shock! Our collaborative culture changed to a culture of “every man for himself” and all office perks like coffee and paper towels, were eliminated to cut costs. I loved working in PwC Consulting and the culture change was so bad and tragic that almost all our top performers left and I soon left too and I am so glad I did. My few remaining friends there constantly tell me about the management incompetence and horror stories. Since IBM sold its PC line to the Chinese, it does not “make” much anymore and more than half of its revenue was from services and consulting. It is an example of a once great American company to a cesspool which is a shame.

    • GianniV

      Right, and PwC was sold to IBM because it was so wildly profitable? I love all these glory days stories of companies that no longer exist.

  • D

    Outsourcing is not as bad as media has made it out to be.

    The right way to look at it is that if there is no outsourcing of jobs, companies may find it difficult to maintain cost advantage or remain competitive anymore , thus raising questions about the very survival of the company itself.

    Hence its either loose some jobs and gain economies to run the company or loose the company altogether and hence loose many more jobs.

    It is really easy to blame other countries for all your problems and also easy to criticise the symptoms but the change will start and the solution will come only once you accept the problem. And the realproblem lies in the way US economy is running right now ie incurring huge debts, massive imports.

    Having said that, lay offs are always tragic and my heart goes out to the families which are passing through this bad phase.

    But, Sooner the attention shifts from “outsourcing is bad” to “Real Problems in US economy”, sooner you will find a way out.

    Hoping for the best !!

    • Blah_blah_blah

      Ginny, weren’t you told to get off of this site? LOL.

    • QA wo skills

      Hence, really? You are enjoying the job you have acquired at the expense of a skilled US employee.

      Having endured teams from India using the term ” hence” I know your point of origin.
      I will soon end my employment at IBM within the next week. I wish you the best and hope karma visits your organization soon.

  • Henley Taylor

    I got let go yesterday and I must say I enjoy the 14 years I gave them. But I’m happy right now because I’m in good health and young and I have an interview in two weeks.This is not the end of life it goes on after IBM, I’m happy very happy.

  • Mary Ann Mcintosh

    Thank you, outsourcing and the inimitable H1B Visa.

    • PGA

      Yes! H1B is a huge problem and a well kept secret from most American workers. It is a huge problem with the phony cries of shortage shouting. It sends throngs of people running back to school when they hear that there is a shortage in “x” profession, when in reality, there is no shortage – only a shortage of people who will work for poverty level wages in a degreed profession. The Rand corporation did an extensive study and there has been no shortage in ANY profession in America in over 60 years – it is all done to in-source people and sleep 30 in an apartment…many do not even have legitimate skills to go along with their phony diplomas – the companies do not care, as long as, each CEO can double his bonus by slashing wages in half.

      Now, the H1C Visa is decimating Nursing. As soon as you hear that there is a “shortage” of “x” you know the insourcing of slave labor is about to begin – it is done to increase supply and drive wages down. In a true shortage – of anything – including labor, wages are going up…not down.

  • Brown

    I’m sure it has dramatic effects across North America. What about the workers in Brazil, that you pay low wages to. IBM didn’t tell about the deal that was made between SunTrust Bank and IBM global who came in and outsourced SunTrust data centers in Atlanta, Ga. and Durham, NC. in 2009. Hiring young kids from the slums of Brazil. IBM also built a data center in Brazil, the people a packed in like cattle.

  • PGA

    It is not a “global economy” if the countries that business is being outsourced to are not also consumers of those products – and most are not. It is a shell game to put a somewhat acceptable and forward thinking label on what is, for all intents and purposes: slave labor.

    Moreover, it does not matter how inexpensively items are made or manufactured overseas if people in North America do not have jobs to purchase those very same products, since, the people on the assembly lines making very little/week will not being buying anything with an IBM chip in it; sustenance itself is the main goal.

    A tipping point for many of these companies is coming. It appears as though, these companies do not want to employ a workforce, yet, want everyone else to keep their own employees, so that they can still have costumers to buy their products. Fuzzy logic – at best.

  • Sick of It

    You know that IBM now Stands for “India Buisness Machines”. Good luck to anyone that works for them, buys from them or uses their services… they will sell you down the river for a buck, just like they do all their employees. The Borad of directors should be ashamed of themselves, but their not, just greedy.

    • sue

      I so totally agree with you. All those layoffs here in North America are going to Asia! Shame on IBM! I hope people wake up and stop buying their products!

  • DE

    Profits are necessary to keep a company alive and growing, but companies just do not take of employee anymore. It is a mentality of I got mine and screw you.

  • susan

    Thanks, DICKWEEDS at IBM.

  • Alan Hill

    Keep your chins up guys. If you are an engineer you are the brains of the machine. I am too and when I got laid off seven years ago it was the best thing that ever happened to me. After about six hours of hurt and confusion I felt reborn. No more corporate pressure, no more rumor mill, and no more making my idiot manager shine off of my hard work.

    If you have the personality for it, consider self employment. Team up with a few colleagues and start a small consulting firm. Don’t forget you have the skills to pay the bills, do it on your own terms. It’s what this country needs!

    • http://Www.tumblr.com David

      Getting laid off from IBM was the greatest thing that happened to me. First and foremost, the company is filled with many useless middle management in the first place, and second, it allowed me to create an idea that netted me over $200 million after taxes. You should laugh at those still there making 150k a year leveraging two homes, 3 cars, and their kids overpriced educations. The joke is on them.

      • DaveS

        what was your idea / what did you do?

    • Dale

      I agree with you Sir. Good comment and well said.
      I too was let go from a big company and no one cared. In fact, they thought I had something wrong with me and that I should not be employed.

      Just like the writer here said: After a period he got up and teamed up, moving forward, so can you.

  • Displaced

    Over 6000 lives destroyed. All to make the shareholders happy. I noticed no senior executives were let go. I VP would equal a significant number of the people who have given there heart and souls to the company. But then the policies of the senior executives didn’t play any part in the fact the company its earnings target. Take some responsibility for your actions and stop making the rank and file suffer you mistakes.

  • mayhavebeenan_IBMer

    This is just a sign of the United States problem. Public companies need to have one control added to them. The CEO and upper salaries need to be capped to an equation which promotes a healthy employee growth along profit growth. Cap top salaries to a factor of number of employees and the maximum salary of twelve times the lowest paid workers. Europe has similar laws. These companies can not operate and effect the monetary position of everyone in the country if we the people of the world or United States allowed the gross abuse of wealth. The walk on wall street folks lost their mind and needed a good focus and capping public companies is the way to go. If you want the sky is the limit salary work at a partnership or private company. If we enact a limit across all companies, the argument that they need the best will not fly. We need to fix our world and the corporate engine is destroying the balance. Government has failed to be the governor to protect the people. Sorry that’s my opinion.

    • LnT India Techie

      In a very interesting fact that has come out of an Indian IT company named L&T Infotech, the company has recruited call girls and prostitutes and showcase these women as software programmers… These sluts are sent to onsite where they seduce the onsite people and have sex with them…These sex sessions are somehow recorded (dont know how????) and are uploaded on INternet…..so in effecct some low grade Indian IT companies have started offering flesh in return for work/projects…To corroborate that one woman with last name saigal, who has been a hi fi call girl ever since her teens, was deployed at Nordea Bank Christianhav at Copenhagen during 2011. Her managers and other Danes in that bank went on an orgy with this lady…The made her stay in copenhagen for 6 months and let her go after she was banged by all that wanted to do so. The woman was instrumental in retaining the client by lure of the flesh. L&T INFOTECH has its operations in Citibank also. Ther is similar story coming from Ciibank onsite as well. But no videos or pics to corroborate that fact. Overall I fell such things are happening all over the world where sex is being used as a tool to trap and retain clients..

      By the way, the company in question i.e L&T Infotech is considered junk grade even by Indian software rofessionals….but they have managed to bag clinets like CitiBank US through their flesh strategy

  • PayTheUpfrontPrice

    Wow. The responses to this article really demonstrates the value of a good education and real world experience…and the lack there of. FYI slackers, did you know that IBM is the second largest software company in the world and employs more PHDs than any other organization? That’s right DAs, they don’t make PC’s, printers or typewriters anymore.

  • ex-ibmer 2010

    level of ignorance and misguided information is unreal. Outsourcing on the technical side is just one part of the story. One thing to note that in the shift to higher value business – IBM acquires great companies and talent. It appears that management is now realizing how much skills of the long timers have languished and acquired employees are much more talented and hands-on. (I know countless folks in marketing and even sales management that never called on a new prospect – scary!) Of course industry consolidations means overlap and redundant roles and layers. Indeed middle management roles prepare one for only doing the “IBM process”. But the sad part is most probably the VP/Director level will stay ..

  • Steve

    What a coincidence, several months before IBM modified the 401k matching program so that if you are not with IBM on Dec 15th, you lose the match. Justin time for the layoffs to hit ! What a crap pool of a company, I worked there for 1 year and could not believe the worthless cesspool of middle and upper management and the toxic work environment so I quit. Glad that I did too and never looked back. When recruiters approach me for returning to IBM, I say “I will never go there again, now or ever in the future.” Going to enjoy watching the implosion of IBM.

    • Lou Vignates

      It is now October, 2013, and the decay of IBM is showing in its performance in the stock market. Steve, are you enjoying the implosion?

  • kls

    Rochester, MN, whose powers that be will sell their souls to cater to Mayo Clinic, appears indifferent to Big Blue’s shrinkage. I hear that when IBM opened here, there was dancing in the streets. Now IBM gets no notice as the city and state toss bows and kisses and tax bucks to Mayo.

  • ex-ibmer20

    wow look at the comments here against outsourcing….I was let go by IBM 6 months back and am better off outside the mediocre work environment. It took me 6 months to re-skill myself to the current market realities. The kind of knowledge older workers (10+ years experience) is appalling and would have worked 10 years back.
    The people, systems and processes in place reward robots and not creativity n innovation.

    After all the elephant got tired of dancing and now needs become a B-boy which would be interesting to watch