IBM Announces Job Cuts; Employee Puts Figure at 1,000

The layoffs comprise about 5 percent of the plant's 4,500 workers, says Todd Martin, an IBM spokesman at the plant near Binghamton, N.Y.

An IBM employee at the plant, speaking on condition of anonymity, says company officials held a meeting Thursday morning and announced that 1,000 workers in IBM's server group will be cut, with about a quarter of the job cuts falling on Endicott.

IBM server group spokeswoman Jan Butler says layoffs are under way at IBM plants beyond Endicott, but could not confirm the number of employees or plant locations affected.

"It's up to the individual locations to determine where they can find efficiencies," Butler says.

The Endicott plant's software duties for IBM's iSeries servers and zSeries mainframes will be consolidated at IBM plants in Poughkeepsie, N.Y. and Rochester, Minn., respectively, with about 80 workers at Endicott to be offered jobs at those facilities, the IBM employee says.

Most of the jobs cut belong to designers of software for the iSeries and zSeries computers, along with some accounting and finance positions, Martin says. The employees will remain on the payroll for 60 days; half will have the opportunity to seek jobs elsewhere inside IBM, he says.

"It's based on the premise that we evaluate our business and look for ways to achieve greater efficiency by eliminating those redundancies and consolidating work," Martin says.

Lee Conrad, a former IBM employee at the Endicott plant, says the mood at the plant has been tense during the past few weeks.

Layoff fears were fueled by IBM's earnings report last quarter--its worst performance in more than a decade--and subsequent hints by CEO Samuel Palmisano that IBM would trim its 320,000-strong work force.

"The stress inside the plant has been on overload for the past few weeks," says Conrad, who now heads the AllianceIBM, a division of the Communications Workers of America union that is attempting to organize IBM employees. "People are still hanging on, waiting to see if their business unit is going to get cut or if they're going to lose their job."

Over the past two decades, the Endicott facility has shrunk from two plants and a laboratory employing 11,500 to a single plant with 4,500 workers, Conrad says. Most of the plant's workforce makes chip components and circuit boards for IBM's Microelectronics Division, with smaller groups of employees in the company's Global Services and Server divisions.

The IBM employee says Endicott's Global Services workers had a division-wide meeting scheduled for next week.

At IBM's annual spring analysts meeting in New York last week, Palmisano did not dispute a Wall Street analyst's prediction that the company would seek to follow its 6 percent drop in quarterly revenue with a a 6 percent cut in jobs--equivalent to 20,000 employees.

Palmisano suggested that the workforce could be reduced by 15,000 this year, simply through normal attrition.

Palmisano says the company would look to cut $1 billion to $2 billion in costs, and would seek "parts of the business to be much more effective in, from a cost perspective." He named "people"as one area.

IBM shares were down 31 cents, at $83.69, in afternoon trading on the New York Stock Exchange.

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