IBM Shifts Staff To Cut Layoffs

Washington, July 30 | Updated: Jul 31 2004, 06:23am hrs
Faced with criticism over offshoring jobs to India and other developing countries, IBM Corp has adopted new internal transfer policies aimed at filling vacant positions in the company with workers who would otherwise get a pink slip.

IBM staff, whose work is sent abroad, are expected to take a comparable job which may be at a lower pay and a low employment classification, The Wall Street Journal reported quoting the companys internal policy documents. If workers not take the comparable job, they are fired from the company, it said.

Company V-P (learning) Ted Hoff would not say how many fewer layoffs he expects this year, but a person familiar with the plans said around 2,000 US workers would lose their jobs -- down from 3,000 IBM predicted in January, the report said. Further, with the US economy starting to recover, IBM is increasing employment for the first time in 3 years. Earlier this year, the company said it expected to boost worldwide employment by 15,000 to 330,000 in 2004, including a net US employment boost of up to 2,000 despite offshoring, the report said.

IBM said it expects the new policy to save money overall by reducing costs associated with hiring and firing. Moving an IBM worker would be 20 to 30 per cent cheaper in the first year than hiring an outsider, the report said quoting a company spokesman. IBM is not unique in trying to mollify its work force, said Stephanie Moore, an analyst with market research firm Forrester Research in Cambridge, Massachusetts.