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IBM will erase 100,000 workers - man with one name

Services staff to vanish

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IBM could layoff - get out your really, really big box of tissues - more than 100,000 workers, according to some guy at PBS.

A PBS writer calling himself Cringely claims that IBM's hush-hush 1,300 person layoff this week could be the start of a not so quiet mass cleaving. Under a project dubbed LEAN, IBM will allegedly gut at least 100,000 people from its Global Services division. Such a workforce reduction would leave IBM with close to 250,000 staff and a much quieter services operation.

"LEAN began last week with a 10-city planning meeting for Global Services, which wasn't, by the way, to decide who gets the boot: those decisions were apparently made weeks ago, though senior managers have been under orders to keep the news from their affected employees," the Cringely person writes.

"LEAN is about offshoring and outsourcing at a rate never seen before at IBM. For two years Big Blue has been ramping up its operations in India and China with what I have been told is the ultimate goal of laying off at least one American worker for every overseas hire. The BIG PLAN is to continue until at least half of Global Services, or about 150,000 workers, have been cut from the U.S. division. Last week's LEAN meetings were quite specifically to find and identify common and repetitive work now being done that could be automated or moved offshore, and to find work Global Services is doing that it should not be doing at all. This latter part is with the idea that once extraneous work is eliminated, it will be easier to move the rest offshore.

"All this is supposed to happen by the end of 2007, by the way, at which point IBM will also freeze its U.S. pension plan."

True enough, IBM's services margins fail to impress. Big Blue's own seem ready to admit that.

But laying off close to one-third of the workforce? Er, easy on the meds, Cringely.

Even cynical types such as your reporter have trouble believing that IBM would be prepared to stomach this kind of massacre. IBM would have to hire the services arm of HP just to deal with processing all of the pink slips by the end of the year.

That said, we're willing to be convinced if you have the documentation.

Cringely's piece sits here. Approach with caution. ®

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