IBM to Cut 5,000 Jobs; D.C. Area Largely Not Affected

By Kim Hart
Washington Post Staff Writer
Friday, March 27, 2009

IBM has told its employees that the company plans to cut about 5,000 jobs this week, according to industry sources with knowledge of the layoffs.

Officials began notifying employees on Wednesday and throughout yesterday about the layoffs. Technology services giant is in the process of shifting a large number of jobs to lower-cost regions, such as India. The cuts will largely not affect the 3,400 IBM employees in the Washington region who focus on providing information technology services to the federal government, a growing business for the company.

"My understanding is that it isn't targeting the people who have skills leaning toward federal or local governments," said Ben Pring, who follows the company for market research firm Gartner. "Outsourcing those jobs doesn't fly in the government context."

An IBM spokesman declined to comment.

Most of the jobs being eliminated come from the global services division, which ranges from software developers to data center managers, according to the sources who did not want to be named because they were not authorized to speak about the layoffs.

Pring said IBM has been gradually moving jobs out of the United States to trim costs for nearly a decade. IBM reported in January that fourth-quarter revenue from its global services business fell 4 percent from the year-ago period. The layoffs come just two months after IBM cut about 4,000 jobs related to sales.

IBM has offered to help some laid-off employees find jobs in other countries where the company has openings, but they would be paid local wages.

Google also announced plans yesterday to shed jobs. Nearly 200 marketing and sales jobs from its international operations will be lost, eliminating some job duplication that occurred as a result of the company's rapid growth over the past few years.

"In some areas we've created overlapping organizations which not only duplicate effort but also complicate the decision-making process," Omid Kordestani, Google senior vice president of sales and business development, said on the company's Web site.


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