IBM Cutting Staff By 1%

Posted Mar 27, 2009

International Business Machines Corp. (NYSE:IBM), the $126 billion company (worth less than Microsoft, but slightly higher than Google) that is known for consulting both domestic and overseas announced earlier this week that they are laying off roughly 5,000 people (1.3% of total employees).

The layoffs started on Wednesday and continued through Thursday.  But here’s the interesting part.  They are moving a large number of jobs to India.  In India, you could basically pay about $220 per month in salary to an employee and they would live as good as an $80,000 per year salary employee.

The job cuts will not affect the 3,400 IBM employees that work in Washington, also known as those that work in IT for the federal government.  The federal government division of the company is actually growing.

“My understanding is that it isn’t targeting the people who have skills leaning toward federal or local governments,” stated Ben Pring of the Gartner market research firm. “Outsourcing those jobs doesn’t fly in the government context.”  IBM made offers to employees to work in different countries, but would be given equivalent wages.

At one point, IBM was rumored to be acquiring Satyam, the IT company in India that is sometimes considered to be the “Enron” of the subcontinent.  Later it was declared that IBM wasn’t planning to bid on Satyam.  That comes to no surprise because they offered to move their own talent overseas.  IBM didn’t become as rich as they are by writing checks.

[via Washington Post]