IBM plans to cut up to 5,000 more US jobs as the company
moves to maintain profit in the economic downturn by moving work to
India.
So far this year, IBM has laid off about 4,600 employees,
including workers in its software unit and sales department.
The latest round of expected job cuts could start taking place
today, according to Lee Conrad, national co-ordinator of unofficial
employee union Alliance@IBM.
Some 1,674 jobs have been cut in IBM's application services
division according to the
union's website. A
further 4,000 US jobs are expected to go in the first half of this
year.
Offshore workers accounted for 71% of IBM's nearly 400,000
employees at the start of the year, up from about 65% in 2006,
according to
The
Wall Street Journal.
The union has criticised IBM for taking jobs away from the US,
but analysts said the strategy will help IBM win overseas contracts
and maintain healthy profits in its services business.
The move will also lower labour costs and enable IBM to compete
more easily with Indian outsourcing companies. In January, IBM
reported $4.42bn in quarterly profit.
At the same time as cutting labour costs, IBM is seeking new
sources of revenue and is
negotiating to buy Sun Microsystems for an estimated
$6.5bn.
Analysts have said that considering IBM Global Services probably
manages more Sun equipment than anybody else, it would make sense
for IBM to control the future of its products.