IBM job cuts hit applications services unit, says union
IBM issued 1,674 layoff notices to U.S. employees in its applications services business on Thursday, as part of a larger round of anticipated cuts to its Global Business Services unit, according to a national representative of Alliance@IBM, an affiliate of the Communication Workers of America, which is seeking to unionize IBM.
The applications services business is one of several areas in IBM's Global Business Services unit, a massive consulting arm that last year generated $19.6 billion in revenue for Big Blue. The Global Business Services unit also posted a 9 percent increase in its revenue.
Alliance@IBM anticipates between 4,000 to 5,000 job cuts to be issued Thursday at IBM's Global Business Services unit, noting the cuts would be on par with those layoffs taken earlier in the year.
"We saw 5,000 job cuts in January-February and with the 5,000 we're expecting today, that brings it up to 10,000 cuts for just this quarter alone," said Lee Conrad, national coordinator for Alliance@IBM. "Many of these jobs are moving offshore and it's a disturbing sign for IBM and the nation."
An IBM spokesman was not immediately available for comment.
UBS analyst Maynard Um, meanwhile, noted in a research note Thursday that he finds it unlikely IBM will transfer all of the affected U.S. positions to cheaper overseas labor markets. As as a result, he anticipates a potential benefit of 10 cents to 14 cents a share to IBM's 2009 earnings.
He also noted that the cuts could signify more aggressive action than previously anticipated from IBM, though it would not be out of line given feedback he has received from the industry suggesting greater employee restructuring.
Um stated in his research note:
In Feb., IBM reaffirmed 1Q09 & FY09 EPS guidance, noting Jan. results were consistent with its outlook, aided by a strong software pipeline & solid long term services bookings. Read-through from potential further restructuring, in our opinion, is mixed. Operational efficiencies may be beneficial to EPS, but may also reflect a more challenging rev environment than thought (perhaps more in the US).
IBM shares were up less than 1 percent to $98.47 a share in morning trading Thursday.
Dawn Kawamoto covers enterprise security and financial news relating to technology for CNET News. E-mail Dawn. 
I'm in IT and I have seen too many cases like above happening in the past many years.
And, still the world is in its worst financial and economic crisis in one hundred years. So, what "skills set" do the Indians bring to the world's stage to offer the real solutions to the current world's financial and economic crisis!!!
One solution: Retrain the American workers who have recently lost their jobs to offer international management consultancy services to the newly empowered Indian companies.
To be a good manager of a corporation, or for any other organization for that matter, one needs to be wise, and not smart. Superficial mathematical calculations is the last thing to be considered. If these workers lose their jobs, they do not have the opportunity to keep building their skills. In the mean while, though, workers of other nations, such as communist China, or communist Russia, or other evil regimes keep building their skills. That?s a loss to you. That?s a threat to our national security.
Let them engage in research and development projects. Let them maintain friendship with the employees of other companies for research tips or ideas, for example. Such are free and valuable assets. You do not have to worry, even if the inventory is getting high. Some day, you will be able to use them. It will come back to you. We must keep the workers working. We must keep the product line running.
Here is why:
Re: "IBM, Bankers at Odds Over OS/2 Migration Path
Vendor advises OS/2 users to switch to Linux, but ATM makers are leading push to Windows"
http://www.computerworld.com/softwaretopics/os/story/0,10801,83884,00.html
Call this "Intellectual Capacity, Capital Strength"; and, It's "Mission Accomplished" - Again!
But, remember that you will always end up with the quality of the "Baby Toys, Pet Food or Baby Milk Formulas..... " that you pay for!
And of course they never outsource the jobs that they could save the most on.. There are brilliant people in India, who would gladly work as upper management for a fraction of what US executives get paid. Moreover, they would be in better position to handle the new Indian work force. Instead executives eat some of the saving into increasing their own salaries.
You know what they say.... "You Get What You Pay For" - Always!
"Jobs" May Come And "Jobs" May Go..... But, Long Lives OS/2!
Let the "Blue and Pink Slips" parties (like it is 1998) begin!
Nah; you don't need to "boycott IBM". What you have to do is to develop a superior "OS/2 Operating System" than the one the Russian Federation loves so much and eat the breakfast, lunches and dinners of those at IBM, Microsoft and the Indians who are denying Americans the rights to self-existence by outsourcing their jobs.
Do you think the West can survive if they ban outsourcing or stop the Indian subcontinent people from entering their country and working alongside their people....?
Unfortunately the answer is NO. In this global era, mutual cooperation and not dominance is the mantra for survival and success. I request all those who have woes against we Indians to calm down and rethink over their approach and behavior.
Above all no one can deny the muscular growth of the countries in Asia, especially China which is ready to take US and the West, heads on. Do you think west can stand the eastern Tsunami with such a skewed approach? Think Again :-)
- by RKMBrown September 24, 2009 1:31 PM PDT
- I was one of the Lead Developers of OS/2, and was in the layoffs at the first of the year. What would you like to talk about.
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