back to article IT vendor layoffs: The axeman cometh

The IT vendor community in the United States was mostly immune from layoffs that happened over the course of 2008, when 2.6m people lost their jobs. But that is obviously changing as the global economy, which IT vendors depend on, continues to weaken. And this week the layoffs, some rumored and others announced, are actually …

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Shouldn't be legal...

for a company that's making money hand-over-fist to lay off anyone. It disgusts me that a company can still be making billions of dollars in profit, yet see fit to get rid of workers that helped them get where they are today. Not because the company is in jeopardy, but so some parasite on the board of directors stock price will rise.

What a morally repugnant and ethically heinous thing to do in these troubled economic times*

*also see Microsoft article

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Unhappy

RE: Shouldn't be legal...

Well, in some countries such as Germany it is harder to fire employees, but then companies know this and so usually hire in countries where they can cut back quicker if required. In the meantime, the board has a responsibility to the shareholders - the real owners of the companies - to try and make as much of a profit as possible, and that duty usually over-rules loyalty to staff. Unfortunate for us grunts but still a reality of life.

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Pirate

Believe the rumor, the LAYOFF is alive at IBM

Believe that it is true, the LAYOFFS began actually earlier than This week. There were some minor numbers last November. However, in the SWG software group, there were around 3,800 affected IBM employees in this round. As one of the unfortunate casualties, I to find it very disturbing that in the shadows of the realease of the 2008 earnings, they time the LAYOFF just before so that it doesn't get noticed. All in all the motivation behind this has to be the benefit of their numbers and the shareholders. In this economy when sales will have to slow down, the best and fastest way to offset this is to sacrifice the very people that gave their all to achieve these record numbers, Thank You Big Blue!

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You've got to be kidding!

Of course IBM is going to lay people off in the US.

This way they can hire them in 3rd world countries as cheap labor.

IBM will make their margins by moving their outsourcing commitments to off shore labor whenever possible. They will also use the lack of internal resources in the US to onshore the cheaper labor when possible.

Add to this the fact that they will be looking for handouts when Obama starts with the tech bailout.

Not a pretty sight.

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Boffin

re: RE: Shouldn't be legal...

"the board has a responsibility to the shareholders ... to try and make as much of a profit as possible, and that duty usually over-rules loyalty to staff."

Yes, that is true. But the board should take a longer-term view of it, rather than focusing on short-term stock price and profit.

Let's say the downturn will last a year, after which hiring and product development will continue as before. Assuming your figures are accurate (about $100,000 per layoff), this is a good percentage of a year's salary for the people laid off.

Any new people they hire in after the downturn is over will need training and time to get up to speed at work, they are not effective for the first few months and will take years to get up to the speed of someone who had done the job for years. This effect is more pronounced in IT, where products are complicated and engineers cannot just pop in and immediately start productive work.

Product development which was postponed will have to be restarted, with probably new programmers and possibly new market conditions. Much of the expert product knowledge within the company will have to be redeveloped, as the teams will have been split up or laid off. The product will be slower to market and cost more to develop.

The effect of layoffs on morale and risk-taking should also be taken into account. When a company has layoffs every year, people don't feel as much loyalty to the company - they are less likely to work hard, more likely to look for a better offer, and less likely to stick around to finish a project before leaving. And if the company has no real reason for the layoffs, the effect on morale is bigger.

Of course, if a company is losing money rapidly, the situation is different - cuts have to be made for financial reasons. But if a company is raking it in, they should invest in the workers that make the company tick - without them, the company is nothing even if it has the best stockholders in the world.

Stockholders are easy to replace, workers are not.

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IBM UK staff on annual fixed term contracts

If your contract is not renewed then you have not been fired.

I wonder how many UK staff will find thier low paid IT job "unrenewable" this year?

Jacqui

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I always wondered why IBM'ers had "Employee *SERIAL NUMBERS*"

I guess we're just interchangeable parts in Sammy's money machine.

It seems that the WebSphere groups were hit hard this week.

A lot of the current US based services people are running scared of something they're calling "GDF". The idea appears to be that management tells you that "your position is moving to X", X being a relatively small number of cities like Boulder, CO or Dubuque, IA. You have the choice to move with it - at your cost - or watch it fly the coop.

If you don't move with it - you can bet that your position's next stop is probably somewhere much further away...

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Anonymous Coward

Oh Lord, what fools these mortals are!

Didnt I read somewhere recently that several companies with large UK-based customer groups are thinking of bringing call centres and infrastructure back to the UK following questions being asked over just how good the overseas staff really are, in terms of user-friendliness and data security?

Its all very well if the lady or gentleman on another continent can read a script in English, but not so good if the script doesnt really help solve the problem, or customers switch to a competitor partly because they have UK call centres is it?

What I want to know is, why is it always the £25k-£35k-a-year 'low end' staff who do the customer-facing work that get the elbow, never the senior management on their £250k+ packages who obviously fracked up since the company is having to lose staff, and never really seem to contribute anything except speeches at the shareholders meetings or for the media and plenty of money to the local golf clubs?

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Alert

<insert title here>

"£25k-£35k-a-year 'low end' staff"

Nice work if you can get it!!!!

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