Major IBM "resource action" underway in Rochester - KTTC Rochester, Austin, Mason City News, Weather and Sports

Major IBM "resource action": cuts impact Rochester engineering teams

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IBM/s main campus in northwest Rochester IBM/s main campus in northwest Rochester

ROCHESTER, Minn. (KTTC) -- Employees inside the massive IBM complex in northwest Rochester are reporting that a so-called "resource action" is underway at Big Blue.  Notification meetings began Thursday at 8 a.m.  The job cuts are being made company-wide.

There are reports that workers in the Systems and Technology Group (STG) in Rochester are being notified that their jobs are going away; in some cases, literally going away to Guadalajara, Mexico.  IBM has been gradually shifting manufacturing lines south of the border over the past nine months.  One source inside IBM says STG will be eliminated at the Rochester complex.

"The cuts were a bit deeper than I expected, affecting some of the Rochester engineering folks that support all the worldwide manufacturing sites, starting the push for worldwide engineering support from Guadalajara also," said one IBMer in the Integrated Supply Chain division. "I do believe the numbers are high though."

"IBM Management and Human Resource Partners will conduct exit interviews with the impacted employees throughout the day today," according to one source.  "Some of the impacted employees may be exited after the interviews while others will retain access in order to close/transfer projects, customers, etc." 

Though it has not been possible to confirm, one report asserted that 550 employees are losing their jobs in Rochester in this latest round of cuts.  If IBM is following similar patterns to other recent job cutbacks, workers will be offered a severance package based on years of service.  If one inside observer is correct, the cuts in Rochester have been going on for weeks, at a gradual pace so as to not attract attention.

"As usual, the total number will not be disclosed as this type of news is devastating to stock price," said this source. "IBM Rochester has let 200 go, five to 15 every week, over the last three months as this does not draw media attention."

Another change in tactics now being employed by IBM involves the withholding of information about how many people in each production unit are being impacted by the RA.  Information about the number of workers, ages and job titles is no longer being included in the packets of information distributed to laid-off employees on Thursday. 

A union group hoping to speak out on behalf of laid-off IBMers, which calls itself Alliance@IBM, continues to maintain a blog where people can post information without negative repercussions to their severance packages.  Alliance@IBM's Lee Conrad says the secrecy of this latest round of layoffs is disturbing.  He says IBM is claiming that workers' rights to privacy are behind the change.

"In the past when resource actions took place, IBM would furnish a section called the OWBPA report that would list ages, titles, business unit and number of employees selected for a job cut," said Conrad.  "With this round of job cuts IBM has eliminated that section claiming employee privacy concerns.  This is IBM's way of suppressing data used to verify and count the number of workers losing their jobs as well as exposing age discrimination in job cuts."

Older IBM employees being targeted in RAs have often spoken out bitterly on the protected Alliance@IBM blog. Some posts after today's firings began:

"Just lost my job after 32 yrs and 7 months. So much for getting great PBCs that still get you RAed!" -Dedication is Meaningless-

"It is true that it is the law to provide OWBPA reports. But if IBM doesn't supply them, who exactly is going to enforce that law? Sadly nobody is." -Ex Roch Beamer-

"I was quite prepared to go quietly in the night, but IBM's casual disregard for the law has me pissed. I had a brief conversation with an employment attorney this afternoon. He's very interested in discussing a possible action based on the lack of OWBPA disclosure. He said we might want to wait until after we're within the 21-day window of 3/31, but I'll learn more on Tuesday." -Tom- 

"Almost 20 years in, fired yesterday, not even so much as a 'thank you for devoting most of your adult life to IBM'... not that I'm surprised. STG (Hardware) in Australia has been decimated, other areas too including SWG (Software). As usual we don't know the real numbers. It's a common theme - the strongest feeling I have is one of relief. Relief that I'm now on my way out of this wretched place. The glory days are gone folks - IBM is becoming a shell of its former self. My heart goes out to those poor folk who still work at IBM and have to put up with all the 'stuff' that is showered down on them from on high. I also pity our customers - in the field IBM technical staff have been cut to the bone (and beyond actually in some cases - down to ZERO). How does IBM expect to support these customers? How can they keep taking customer's money and provide such a shoddy service? Oh that's right, because decency and ethics was replaced by greed some years back. Congratulations IBM on creating an absolute army of former employees who totally despise you and will do everything in their power as customers or competitors to undermine and eradicate your business. As the saying goes "They that sow the wind, shall reap the whirlwind." IBM's day of reckoning is coming - and it will be coming at lot faster than a lot of people think." -theend-

Many of those fuming about the latest round of terminations are focusing on the Older Workers Benefits Protection Act (OWBPA) which has strict guidelines about information that an employer must release during the process for workers over 40 years of age.

"For IBM to say not listing age/title/number selected is out of concern for the privacy of employees is absurd," said Conrad.  "We were given this information freely by employees with the sole purpose of breaking the secrecy of IBM job cuts. Employees who were terminated understood how important this information was to their co-workers, their communities and to the media. This is just another attempt by IBM to hide the number of job cuts taking place and the continued destruction of the IBM employee population in the US. Federal and state governments should look into this and demand transparency or tell IBM no more tax breaks."

Other IBM locations where layoffs are reported to be underway Thursday include Research Triangle Park in North Carolina; Poughkeepsie, New York; Tucson, Arizona; Dubuque, Iowa; Tulsa, Oklahoma; Essex Junction, Vermont; Columbia, Missouri; Littleton, Massachusetts and Endicott, New York.

A spokesman for IBM, Doug Shelton, confirmed the resource action is underway, and gave a good indication of its scope in a statement emailed to KTTC late Thursday afternoon.

"As reported in our recent earnings briefing, IBM continues to rebalance its workforce to meet the changing requirements of its clients, and to pioneer new, high value segments of the IT industry," said Shelton.  "To that end, IBM is positioning itself to lead in areas such as Cloud, Analytics and Cognitive Computing and investing in these priority areas. For example, already this year we have committed $1 billion to our new Watson unit and $1.2 billion to expand our Cloud footprint around the world. In addition, just this week IBM announced a $1 billion investment in platform-as-a-service Cloud capabilities, as well as investments in areas such as nanotechnology which will bring hundreds of new jobs to New York State. This also creates new job opportunities at IBM. At any given time, IBM has more than 3,000 job openings in these and other growth areas in the US."

Shelton maintained that IBM's total workforce has remained stable over the past three years.  He said IBM now employs more than 400,000 people worldwide.

One Wall Street analyst, Toni Sacconaghi of Bernstein Research, recently was quoted in Barron's in this projection of IBM's roadmap for 2014:  "We expect IBM to repurchase $15B or more of its shares this year, and rebalance its workforce by at least 13,000 heads. Many investors believe IBM should be investing in its future by buying new technologies and investing in building capability, rather than rightsizing the organization."

But if IBM's moves are in a tight dance with investors, Rochester's political leadership is just as intent on how it can change Big Blue's course in Minnesota.  State Senator Dave Senjem is listing as one of his legislative priorities to "Reinstate the foreign royalty exemption – to save IBM in Rochester."

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