Massive layoffs rumoured at IBM

With so many IT companies cutting jobs, it's no surprise that employees working for the biggest IT company in the world, IBM, are also worried over the prospects of the axe falling on them. And their fears are not being alleviated by rumours that ''Big Blue'' may be looking at the biggest workforce reduction in its century-plus history - as much as 16,000 employees.

Samuel J. Palmisano, Chairman of the Board and Chief Executive Officer, IBM CorporationThese rumours are being fuelled by postings on an IBM employee union website, the Alliance@IBM, part of the Communications Workers of America union. Most of the comments hint of the axe falling on or around 22 January.

One 2 January, posting from "Tipster," who identifies himself / herself as a Security and Exchange Commission employee, said he / she had seen documents filed with the SEC about layoffs that may come on 23 January. "IBM is not 100 per cent sure; but the fact that we have already been notified of these cuts means there's a good chance the layoffs will go through," the posting said.

But other postings indicate that IBM is already making targeted cutbacks. "Cuts happened today in Canada and will continue this week," said one posting on Wednesday from "unluckygrl." And several postings on Tuesday said contract workers were let go in IBM Global Services and "global administration."

Employees have been hearing that layoffs will take place in late January, said Lee Conrad, national coordinator of the Alliance. The size of the reduction may be larger than those in the past few years, he said. ``Generally they go in batches of a couple hundred here and a couple hundred there,'' said Conrad.

Alliance@IBM, while still in an organizing phase and not yet recognized by IBM, has about 6,000 members, including IBM employees and retirees, according to Conrad. But because the union has not reached an employment contract with IBM, there is "not an awful lot" it can do except raise awareness of the issue, he said.

The worldwide economic slump has tightened companies' technology budgets and IBM may report a 1.6% drop in sales last quarter to $28.4 billion, based on the average analyst estimate. ``We constantly rebalance our workforce and continue to invest in growth areas,'' said Ian Colley, a company spokesman. He declined to comment further when asked about the Alliance posting.

IBM has more than 386,000 employees worldwide, according to its Web site. If the rumored 16,000 figure proves accurate, then, it would equal roughly a 4 per cent reduction in headcount. Job has frequently pruned jobs over the past few years. The company eliminated 1,570 positions in May 2007 and 450 jobs that June.