IBM Job Cuts Exceed 15,600

Total employees laid off in latest round of job cuts is more than twice what some estimated.

NEW YORK (CNN/Money) - IBM on Tuesday said the total number of employees who lost their jobs as a result of its cost cutting efforts in the second quarter exceeded 15,600, more than twice what some company watchers had estimated.

The tech titan disclosed that number in its comprehensive quarterly financial statement filed with the Securities and Exchange Commission.

IBM, the world's largest supplier of computer hardware and information technology services, said the bulk of the job cuts were in its Global Services division, where most of 14,213 jobs. Another 1,400 cuts will come from its Microelectronics business, IBM said.

About 57 percent of those laid off had left the company as of June 30. The remaining 43 percent will be off the payroll by Sept. 30, IBM said in the filing.

IBM CEO Samuel Palmisano and Chief Financial Officer John Joyce also signed a sworn statement attesting to the accuracy of the company's quarterly financial statement, called a 10-Q.

Following a series of corporate accounting scandals, the SEC established a rule requiring the senior executives of companies that had 2001 revenue of at least $1.2 billion to take an oath certifying that their financial statements are correct.

The company's filing puts the magnitude of its job cuts into a much clearer perspective than it had been.

IBM (IBM: Research, Estimates) has a reputation for making "stealth layoffs," referring to small job cuts across a range of departments, which keeps it out of the public eye. During this latest round of layoffs, the company did not publicly announce the cuts, but it did acknowledge that job cuts were being made if reporters called and asked.

However, IBM refused to provide specific numbers, confirming only that job cuts were made and in which divisions.

The Alliance@IBM, a labor union representing about 4,000 IBM employees, has been chronicling the job cuts and had estimated the total number at about 7,000.

But union representatives pointed out that because IBM's Global Services unit is somewhat fragmented, with many employees working from their homes and others scattered in small offices across the globe, determining the actual number of cuts there would be difficult.

At last count, IBM employed more than 319,000 people worldwide, roughly 160,000 of whom were based in the U.S. Some industry observers have suggested that the sheer size of the company and the scope of its operations make it nearly impossible for IBM to provide a specific number of expected layoffs.

Others pointed out that IBM's top management typically does not mandate a specific number of job cuts, but instead delegates such decisions to the company's various divisional managers.

Using that approach, IBM's top brass wouldn't know what the actual number is until each of its divisions reports back.

Initially, IBM had estimated that it would record a total of between $2 billion and $2.5 billion in charges related to the job cuts and other restructuring moves. But when it reported its second-quarter results, the company said that total may reach as high as $3 billion.

"IBM's Global Services unit" == 15,000 more unemployed consultants, programmers, analysts, DBA's, etc..

Umm..is it ok now, Congress, three years into the IT job depression, if we nudge the 200,000-per-year H1-VISA computer-job-grab door shut? That 200,000 is in addition to the Canadian and Mexican professionals who can enter under the NAFTA agreement without quota restrictions.

It amounts to a massive US government program specifically designed to give away the jobs of 35-55 yr old American IT professionals to talented, but less experienced, under-30 professionals from other countries, who will eagerly work for compensation 70% less than the American market, PLUS one green card after 3 years.

The "job shop", Consulting, and major software vendor folks get rich, the over 35 crowd of American computer professionals find new careers (after losing their houses), and the best-and-brightest from India, the Philippines, Ireland, South Africa, and Russia assume control of the U.S. Software and IT market.

Oh, and of course, the politicians who support this policy are VERY well compensated for their votes. Everyone < important> wins. Is this a great country, or what?!

</end rant>

It's not an "allegiance" thing. It's all about business, and perverse incentives established by an "oh-I'm-such-a-good-person" government policy.

The computer companies need cheap labor, and more importantly, stable labor. There's nothing more stable than a foreign "indentured servant" who is afraid to offend the company he works for, or his sub-contractor job-shop who imported him. To lose favor means no green card, and back home to the hot $1 a day jobs. On the other hand, there's nothing more unstable than an upwardly mobile, college educated, experienced programmer, analyst, or data architect who might leave at any moment because another company offers him $25,000 a year more. Who would take his/her projects? When I was an independent consultant, I had a company revoke an contract offer once they found I wasn't a "indentured" foreign national (no kidding!).
The "job shops" make most of the money on H1B labor. They only exist because the tax law and IRS treatment of the tax law makes it almost impossible for a company to hire an individual as an independent consultant. If a foreign national had to pay his own freight over to the US, set up shop, and interview against his American/English speaking counterpart for the same job, the experienced local would get the job hands-down. However, the job-shop must act as the W2 "employer". It gives them the ability to set arbitrary rates, regardless of the market. The client-company may be willing to pay $60 or $120 per hour for the contract employee, but two prospects will be presented, one foreign and one American, "packaged" together at $100 per hour for either one. Of course, the job-shop also lets the company know that the foreign national has signed binding three year contract, and the American...well, you know how unreliable they can be. The job-shop pays only $15 or $20 per hour for the foreign national, but several times that for the American, so, which employee do you think they really want to place? (In fact, I no longer release my resume unless it's going directly to a client or employer, because unethical job-shops will use it to "sell" foreign H1B employees.)
Again, remember why this is all possible! The IRS will not allow any IT professional (specifically spelled out in the tax law) the right to walk into a company and negotiate a contract for services, without later raiding the employer, and charging them back-taxes for "employing" the contractor (even though the contractor has paid taxes, and the IRS KNOWS this).
Immigration policies have become the new 3rd-rail of American politics, because of the growing number of recent, 3rd world (especially Hispanic) immigrants. Where do these people come from? Socialist countries? What do they respect and expect? Government power and control, just like back home. These folks may be more entrapreneural than most of the friends they left back home, and most may want to be in America to be loyal Americans. However, the cultural attitudes they grew up with are hard to shake, and the local Socialist-Democrat in the US will be their favorite politician. What do the Democrats do whenever an Immigration issue comes up? Of course, they demogog the any opposition as racist, xxxx-phobic (insert your favorite in "xxxx'), and of course the gold standard, "facist".

Look, immigration is good. Immigrants are good. H1B visas are GREAT. We just need a level playing field, without IRS harassment, and with H1B visas issued relevant to the NEED, not the next election cycle. There used to be requirements for an employer to advertise for a certain period of time, prove the need, etc., before they could hire an H1B. It was a joke. You'd see an advertisement for:

"PH'D Computer Engineer wanted: Must have 30 years experience designing silicone chips, building the original edition of Windows, have designed the propulsion system for the Space Shuttle, and must have flown a recent Shuttle mission in the past 3 months. Salary: $18,000 per year. Must pay all relocation expenses. Interview is in Afghanistan. Job is in a hazardous waste dump in Calcutta. Urgent need; respond immediately. Send a $100 background check fee with resume and the 94 page job application."

It was a farce. They were merely meeting the government requirement to "prove" there were no able American's who would consider the job. If they're going to issue H1B's, they ought to at least drop the quota 10% for every 10,000 lost IT jobs.

But then, I'm not politically correct. I'm just one of those angry, white, lazy, middle aged American males who can't compete, and my beautiful immigrant wife, "brown", straight-A Christian children, and countless foreign-national friends know it.

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