IBM began laying off employees across the country Thursday as part of a massive restructuring campaign that could ultimately cost as many as 13,000 jobs.
Workers were fired in Vermont, Massachusetts, Arizona, Iowa, Missouri, North Carolina, Oklahoma, New York and Minnesota, according to the employee advocacy group Alliance@IBM. The true scope of the job cuts is hard to gauge, the group said, because IBM has stopped including the numbers, ages and titles of fired workers in the packets distributed to employees.
Not every state is seeing the same level of cuts, however — and the reason may have less to do with business efficiency and more to do with local officials trying to cut side deals with the company.
For example, New York saw more than 700 IBM employees lose their jobs last summer. But in the current round of layoffs, state officials and sources for Alliance@IBM say New York appears to be racking up much fewer losses.
What could explain the change? Officials in the administration of Gov. Andrew Cuomo (D) say New Yorkers were spared largely because of a deal announced earlier this week to add jobs in Buffalo and maintain 3,100 high-tech positions in the Hudson Valley.
"New York is the only state that did not experience any layoffs and actually has added 500 new jobs in Buffalo as part of the partnership with IBM," said Alain Kaloyeros, senior vice president and chief executive officer at the University at Albany’s College of Nanoscale Science and Engineering.
Some state lawmakers say they’ve been kept in the dark about details of the plan. Neither the state nor IBM would disclose specific information about the number of jobs lost this week. The company also has declined to disclose the number of employees they have in the state overall.
Assemblyman Kieran Lalor, a Republican who represents part of Dutchess County, decried the lack of transparency. Counties and school districts often permit IBM to pay lower property taxes in exchange for creating or retaining local jobs, he said, but governments then have no way of knowing whether the company has made good on its promises and whether the tax cuts actually work.
“It’s impossible to tell what we’re getting back in return if we don’t know how many IBM jobs there are in a particular region or state,” said Lalor. “It’s complicated, because every level of government to some extent is subsidizing IBM.”
Cuomo’s announcement earlier this week was particularly confusing because of its promise to maintain 3,100 high-tech jobs in the Hudson Valley, which includes parts of a dozen counties. Currently, there are 7,000 high-tech employees in Dutchess County alone.
“If there’s 7,000 in Dutchess, even if we maintain 3,100, that means you’re whacking almost 4,000 people, and that’s devastating,” said Jim Coughlan, comptroller of Dutchess County. Coughlan, a Republican who is also running for state Senate, said Cuomo is merely moving jobs from one part of the state to another.
IBM has a long history in New York. The company was founded in Endicott, and its corporate headquarters are in Armonk. But the company’s footprint in small towns across the state has steadily diminished as IBM has gone global — despite hundreds of millions of dollars in local tax breaks.
During one round of layoffs in 2012, state Sen. Greg Ball (R) complained about the lack of accountability.
“They have already received hundreds of millions of dollars from New York State taxpayers," Ball said at the time, decrying the tax breaks as "corporate welfare."
An IBM spokesperson said the current round of layoffs is part of an effort to “rebalance its workforce to meet the changing requirements of its clients, and to pioneer new, high-value segments of the IT industry.”
In a statement, the company said it is creating new job opportunities in New York and that, at any given time, the company has more than 3,000 job openings.
“Just this week IBM announced a $1 billion investment in platform-as-a-service Cloud capabilities, as well as investments in areas such as nanotechnology, which will bring hundreds of new jobs to New York State,” the statement said.
The company is shooting for the ambitious goal of $20 in earnings per share by 2015. In addition to laying off workers, IBM has poured money into buybacks to make its stock more attractive to investors. Last October, it pledged an additional $15 billion in buybacks.
"There are a lot of tax-wide state dollars given as an incentive, I don't knock IBM for taking advantage," Coughlan said. "If somebody's going to give you a handout, you take it."
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