May 30, 2007 12:13 PM PDT

IBM to cut almost 1,600 more jobs

IBM to cut almost 1,600 more jobs
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Marking a second round of layoffs this month, IBM announced Wednesday that it will cut 1,566 jobs from its global workforce, primarily in its U.S. strategic outsourcing services business.

Big Blue, which employs 355,000 workers worldwide, said it expects to cut a total of 3,016 jobs by the end of the second quarter. That number includes 1,300 positions eliminated earlier this month.

The move comes at a time when the company is squeezed between operating costs and revenue for its strategic outsourcing business in the U.S. During the company's first-quarter earnings conference call in April, Chief Financial Officer Mark Loughridge said the company would "rebalance" its resources.

IBM's services business employs 128,000 people in the U.S, with the bulk of those working in strategic outsourcing, said John Bukovinsky, an IBM spokesman.

"Strategic outsourcing is quite dynamic...contracts are renegotiated on a constant basis," Bukovinsky said.

The company's strategic outsourcing business takes care of such tasks as taking over a customer's help desk, or data management center, and operating it for the customer. The larger contracts typically span 7 to 10 years and cost hundreds of millions of dollars. These larger contracts often involve IBM hiring employees who previously worked for the company on its software, systems or other assets.

But over the past five years, customers have been moving toward shorter contracts of two to three years, involving specific projects, Bukovinsky said.

"They're outsourcing various pieces, so the size and length of the contract is smaller," he said, adding such contracts usually do not require inheriting customers' assets and employees. "There's less upfront costs for us and they tend to be higher (profit) margin engagements."

Customers, as a result, may find it easier to turn to competitors for further outsourcing needs, whereas longer contracts that call for assuming customers' assets and employees may make it more difficult to jump ship.

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34 comments

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MICROSOFT!
"Customers, as a result, may find it easier to turn to competitors for further outsourcing needs, whereas longer contracts that call for assuming customers' assets and employees may make it more difficult to jump ship.". Perhaps this is why MICROSOFT JUST "LOCKS THEM IN". Huh!
Posted by Commander_Spock (3123 comments )
Reply Link Flag
Moro*
Microsoft is one of the few companies left that actually produces something in US and generates billions of dollars worth of exports and employees in US. My be some of these IBMers can find a job there if they can get over their false pride and loath for MS, or they they could just pack up and move to India or China, I hear IBM is hiring heavily there.
Posted by FutureGuy (742 comments )
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>>>"IBM's services business employs 128,000 people in the U.S,"<<<
... with the bulk of those working in strategic outsourcing, said John Bukovinsky, an IBM spokesman.

"Strategic outsourcing is quite dynamic...contracts are renegotiated on a constant basis," Bukovinsky said."&lt;&lt;&lt;. How about if the United States Military developing and deploying "combat robots" and have these soon-to-be-laid-off IBMers command them; in this way there will be no need for Members of the United States Military putting their lives on the lines un-necessarily!
Surely, if NASA can put robots on Mars... then they can certainly "combat" ready robots on the battle fields of IRAQ.... to show the bad guys a thing or two. We can even have the "robots" managing the oil fields all by themselves too. Wow!

Star Wars You Say!
Posted by Commander_Spock (3123 comments )
Reply Link Flag
Coming
soon to a battlefield near you!!! But I'm not sure I'd want some outsourcing people to run the 'bots. They'd probably hire some al-Qaida company to run them.
Posted by suyts (824 comments )
Link Flag
So....
... how about a surprise attack on the Redmond Campus and have a good many of Lenovo's PCs running eComStation whenever it is launched. Perhaps, the "joint forces" (IBM and Serenity Systems International) attack can be launched by Christmas Day -- 2007!

"eComStation 2.0 Beta 4 released"

<a class="jive-link-external" href="http://www.ecomstation.com/" target="_newWindow">http://www.ecomstation.com/</a>
Posted by Commander_Spock (3123 comments )
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Teachers ahoy
What america needs is a service that looks for people like this so that their abilities can teach the next generation.
They may not be able to cut the high end or may just be retirering or were working on somthing finnish but in a school a lot of people from there could be put to good use.
So where are the plans as to what to do with these peps.
Posted by wildchild_plasma_gyro (296 comments )
Reply Link Flag
The story stated
"will cut 1,566 jobs from its global workforce, primarily in its U.S. strategic outsourcing services business." I'm pretty sure we don't need some knot-head teaching our children how to outsource jobs. It does make one wonder though, was it that they couldn't outsource properly, or is everybody already outsourced that can be?

Seriously though, the fact that IBM is downsizing their outsourcing service can only be seen as a positive sign for the U.S. worker. No sympathy here for the people who help rid other Americans of their jobs. Sucks, don't it. :-)
Posted by suyts (824 comments )
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Karma?
IBM "will cut 1,566 jobs from its global workforce, primarily in its U.S. strategic outsourcing services business." You decide. :-)
Posted by suyts (824 comments )
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THE BOEING's "DREAMLINERS"...
... AND OTHER THINGS LIKE THAT! Now come on folks America's (IT) workforce cannot all all of cake; and, the icing too, the Indian economy has got to be able to make its payments to companies like BOEING, GE... for dem DREAMLINERS (that are about to start shipping by next year) and Electricity Generation Equipment; and, the once lowly paid Indian IT workers and others have got to get that chance to fly in style for once. Can't have the cake, the icing as well as the "crumbs" too--all by ourselves, it work/cut both ways!
Posted by Commander_Spock (3123 comments )
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Oops.... Correction!
Should have been "cannot eat all of the cake..." instead of "all all of cake.."
Posted by Commander_Spock (3123 comments )
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Just say NO
when IBM, Deloitte and the rest of the bloodsuckers call. IBM was once a great company, now just a pathetic bunch of dreck.
Posted by gggg sssss (2285 comments )
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>>>"IBM, Deloitte..."<<< Remember though....
... that Charity Begins At Home. What is better; feeling some "economic pains" through outsourcing or securing the world's oil-pipelines with "real" blood!
Posted by Commander_Spock (3123 comments )
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Signs Of Things To Come!
"A consortium, led by Citigroup Incorporated, and including China Life Insurance Company, China's State Grid Corporation, International Business Machines, and two mainland investment firms, beat a group led by France's Societe Generale to purchase Guangdong Development Bank. The purchase should help the southern China lender recover from its current troubles. IBM will own 4.74 percent with Citigroup, China Life, and State Grid each owning 20 percent, CITIC Investment owning 12.85 percent, and Puhua Investment owning 8 percent." Replicating these actions then; (in terms of a focus on Development Banking in the Western Hemisphere) and, one sees the monumental tasks (the tip of the ice-berg/"strategic outsourcing services business" opportunities....) at hand for companies like IBM. Duh!

<a class="jive-link-external" href="http://www-03.ibm.com/industries/financialservices/doc/content/news/magazine/2016238103.html?printable=yes" target="_newWindow">http://www-03.ibm.com/industries/financialservices/doc/content/news/magazine/2016238103.html?printable=yes</a>

Do you really know what you are "getting to think"! "To the left, To the Left....."
Posted by Commander_Spock (3123 comments )
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