Employees were shocked to be told this week that the company was looking to shed staff, although an IBM representative told CW360.com, "There are no enforced redundancies. No one has been earmarked for redundancy and we have not quantified the numbers to go."
"IBM is seeking redundancies at time when everyone expects an upswing in it services market in second half of this year. This appears to be a short-term move to prop up its share price and they are asking employees to pay the price," said Peter Skyte, national secretary of the Information Technology Professionals Association, part of Amicus MSF trade union.
"The IT services sector has a secure future," he added, warning IBM not to "treat its employees like 19th century farm workers who are employed on a seasonal basis, dismissed at the end of the harvest".
The IBM redundancies follow a call for 1,500 volunteers from ICL, now Fujitsu.
IBM said it expected the volunteers to amount to "a small percentage" of its existing workforce. Insiders at the company have told CW360 that up to 1,000 jobs might go and expressed fears about what might happen if the numbers were below those required by head office.
Meanwhile US trade unions were set to confront shareholders at IBM's annual meeting today calling for assurances that IBM will exclude pension fund income from the calculation of executive bonuses, the Communications Workers of America said.
The meeting was scheduled to discuss pay packages for its executives. In 2001, IBM's then chief executive Officer, Louis Gerstner, was paid £7m in salary and bonuses. In separate payouts in 2001, Gerstner received £1.75m from a long-term incentive program payout and other compensation.
Earlier this month, IBM released a first-quarter financial report which, it said, was "disappointing," because of falling revenue across product lines. For the first quarter of 2002, which ended 31 March, IBM reported net income of $1.19bn (£816,779m) and revenue of $18.6bn (£12.7bn).
According to the US union, IBM's pension plan last year produced 13.2% of overall company pre-tax earnings.