IBM draws criticism for job cuts, outsourcing

IBM's reported plans to lay off thousands of U.S. workers and outsource many of those jobs to India, even as the company angles for billions in stimulus money, doesn't sit well with employee rights advocates.IBM employees are being dealt a double blow, said Lee Conrad, national coordinator for Alliance@IBM, a pro-union group that has been fighting IBM's outsourcing for years.
Business Week reports that IBM's workforce increased from 386,558 in 2007 to 398,000 at the end of 2008.
"We're outraged that jobs cuts are happening in the U.S. and the work is being shifted offshore," Conrad said. "This comes at the same time IBM has its hand out for stimulus money. This to us is totally unacceptable."
IBM wants a share of the money in President Obama's American Recovery and Reinvestment Act for projects updating power grids, creating electronic health care records and furthering the use of broadband.
"In the research we've done working with the transition team, we know that $30 billion could create 1 million jobs in the next 12 months," IBM CEO Sam Palmisano said in January. Watch how IBM hopes to benefit from the stimulus »
The problem is where those jobs would be, said Ron Hira, a professor of public policy at the Rochester Institute of Technology.
"This is really a question of policy," Hira said. "IBM is doing what's in its best interest, and in this case it's not in the best interest of America. And that's why you need policymakers to step in to ensure that this money gets spent to create American jobs." Watch the outcry generated by IBM »
IBM has not responded to multiple requests for comment from CNN after the Wall Street Journal's report that the IT giant would be shipping 5,000 U.S. jobs overseas.
"We have no problem with job creation in other countries," Conrad said. "We have no problem with global expansion. We realize IBM is a global company and has been for many years. But this is different. This is cutting jobs in the U.S. and shifting the work offshore. This isn't job creation. It's job shifting."
According to Business Week, IBM has indeed been shifting jobs. The magazine reported that the company's workforce went up from 386,558 at the end of 2007 to 398,000 at the end of 2008. But U.S. employment fell from 121,000 to 115,000 during the same time.
Hira, author of the book "Outsourcing America," said it's not just IBM moving jobs out of the United States.

"The problem here, though, is that these companies have an inordinate influence over the political process," he said. "They have a huge, disproportionate amount of power, political power, and can influence the process."
For that reason, he said, "you really do need the American public to sort of stand up and say, 'Wait a second. This is just not right.' ... I certainly hope that there's a backlash, because there should be. This is bad for America."

IBM to cut 5,000 jobs in U.S.

NEW YORK - IBM will cut about 5,000 jobs in the United States, adding to similarly large cuts in the past few months, sources with knowledge of the matter told Reuters on Wednesday.
The job cuts will account for over 4 percent of IBM's U.S. workforce, which totaled around 115,000 at the end of 2008. The sources, who were not authorized to speak publicly on the issue, said the cuts will mostly be in IBM's global services business, which includes outsourcing and consulting services.
An International Business Machines Corp spokesman declined to comment. The company, which had a total workforce of 398,455 as of end 2008, has not disclosed how many jobs it has cut so far this year, but has said it was making "structural changes" to reduce spending and improve productivity.
IBM, which now earns around two-thirds of its revenue from outside the United States, has been expanding its workforce in emerging markets like India and China.
At the end of 2008, employment in the BRIC countries -- Brazil, Russia, India and China-- totaled around 113,000.
IBM has been hit by slower U.S. technology spending, although it has fared better than many rivals thanks to its global footprint and a decreased emphasis on hardware sales.
A month ago, IBM affirmed its full-year forecast of $9.20 earnings per share, and said contract signings for its business services had grown so far this year.
Wednesday's news also comes as IBM is in exclusive talks to buy Sun Microsystems Inc, according to sources familiar with the matter, a move that would create a clear leader in the high-end computer server market.
IBM shares fell 0.42 percent to close at $97.95 on the New York Stock Exchange. (Reuters)