Has IBM resorted to scattered layoffs globally?

Technology giant IBM is resorting to "scattered layoffs" and the total could be nearly 4,600 employees in North America even though the company has reported surprisingly strong quarterly profits in January, a media report says.

"Big companies also routinely carry out scattered layoffs that are small enough to stay under the radar... and IBM is one such company," the New York Times said.

Interestingly, after reporting strong quarterly profits in January, its Chief Executive Samuel J Palmisano in an e-mail message to employees said that while other companies were reducing jobs, his company would not. "Most importantly, we will invest in our people," he wrote.

But the next day, the New York Times said "more than 1,400 employees in IBM's sales and distribution division in the United States and Canada were told their jobs would be eliminated in a month. More cuts followed, and overall, IBM has told about 4,600 North American employees in recent weeks that their jobs are vanishing."

Quoting J Randall MacDonald, IBM's senior vice-president for human resources, the newspaper said "it was routine for the company to lay off some employees while hiring elsewhere".

IBM says it remains the largest high-tech employer in the US, with 1,15,000 workers. But IBM's American employment has declined steadily, down to 29 per cent of its worldwide payroll of 3,98,445 at the end of 2008.

However, experts have a different take on this. According to them, these unannounced cuts raise issues of disclosure and the treatment of workers.

The report cited Harley Shaiken, a labour economist at the University of California, Berkeley, as saying that "the issue becomes all the more pressing in this downward economic spiral."

Meanwhile, as part of a government filing last week, IBM said its workforce in Brazil, Russia, India and China had climbed to 1,13,000. These are markets with faster growth than the United States, and less expensive skilled labour.

"At IBM, the layoffs are coming swiftly, if with less disclosure. The estimate of 4,600 job cuts comes from adding up the itemised headcounts in information packages given to employees in each of the businesses," the report said.

NYT further added, "In its financial statements, IBM does report the cost of severance payments and outplacement counselling for layoffs about USD 400 million annually in the last five years but not head counts."

Meanwhile, IBM workers whose jobs are being eliminated have said the undisclosed cuts, and the timing, seemed to contradict the company's public statements.

Agencies