IBM rumored to lay off 150,000 by year-end
- 08 May, 2007 08:50
A report by Robert Cringely on the PBS Web site says IBM is planning to lay off 150,000 U.S. workers by the end of this calendar year.
An analyst who covers IBM called the report "hogwash," saying IBM's business is doing well and that the company's overall number of employees has gone up in the past five years.
According to Cringely, an IBM project called LEAN that resulted in 1,300 layoffs last week was just a prelude to massive job cuts to happen this year at IBM Global Services. Cringely cited unnamed sources within the company who say "they are about to undergo the biggest restructuring of IBM since the Gerstner days, only this time for all the wrong reasons."
The job cuts are tied to IBM's growing reliance on outsourcing, the report states.
"LEAN is about offshoring and outsourcing at a rate never seen before at IBM," Cringely reports. "For two years Big Blue has been ramping up its operations in India and China with what I have been told is the ultimate goal of laying off at least one American worker for every overseas hire. The BIG PLAN is to continue until at least half of Global Services, or about 150,000 workers, have been cut from the U.S. division."
The layoffs, along with an IBM move to freeze its U.S. pension plan, are designed to raise the price of IBM shares on Wall Street, Cringely says.
IBM spokesman Jeff Couture told Network World he doesn't expect the company to comment on the report about possible layoffs. "Basically, we don't comment on what we will or will not do in terms of rumours, which this seems to be," Couture says.
Analyst Bob Djurdjevic, president of Annex Research, says IBM may be trimming 1,000 jobs here and there to support its outsourcing goals, but there's no way the company would lay off 150,000 employees. "There's no business reason for IBM to do that," Djurdjevic says. "IBM's business is doing well. They may be trimming here and there but certainly not to that extent. ... It's hogwash. whoever is saying that should find themselves another job."