July 29, 2004 4:57 PM PDT

IBM downsizes U.S. layoff plans

IBM's plans to move work offshore will result in fewer U.S. layoffs than the company had anticipated.

The hardware and services giant on Thursday said its efforts to shift work overseas have not changed, but that it is taking more aggressive steps to find other IBM jobs for employees slated to lose their positions. Big Blue said the number of offshoring-related layoffs will decrease, but the company did not provide a specific figure.

IBM had projected it would lay off 3,000 workers this year in favor of workers overseas. A source close to IBM said Thursday that this year's layoff count due to offshoring will be closer to 2,000.

The Wall Street Journal on Thursday first reported on IBM's internal recruitment effort and the reduced layoff projection.

IBM says it has put more effort into giving workers threatened with layoffs time and training to prepare--and to seek other positions within the company. "Every effort is made to keep an employee here," said company spokesman Clint Roswell.

As part of the initiative--begun around March--workers who stand to be laid off because of offshoring or other shifts in business strategy are given up to 90 days notice, up from the company's traditional practice of a 30-day warning.

Earlier this year, IBM announced a two-year, $25 million program that offers more training to employees who fear their jobs could move overseas. IBM said it will make the retraining money available to business partners as well.

Also as part of an internal recruitment push, IBM is working on software called Opportunity Workplace that aims to match employees' skills with job openings.

IBM is one of a number of companies that have been scrutinized for their plans to shift work abroad. "Offshoring"--sending technology jobs and other work to lower-wage nations such as India and the Philippines--has become a hot-button issue over the past year or so. Defenders of the practice say it ultimately assists the U.S. economy. But critics argue it costs U.S. workers jobs and threatens the country's long-term tech leadership. The exact scale of the trend remains unclear.

In addition to announcing plans to transfer thousands of U.S. jobs overseas this year, IBM also is acquiring Daksh, a 6,000-person company that offers transaction processing and telemarketing services in India.

IBM has announced plans to add 15,000 employees worldwide in 2004, to be spread across the United States, Europe and Asia.

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