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Technology

IBM: 100,000 Lay-Offs?

Photo of Douglas A. McIntyre
By Douglas A. McIntyre Published
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The Inquirer and a columnist at PBS are reporting that IBM (IBM) may be plannning to lay off as many as 100,000 to 150,000 members of its US workforce. The reason would be that most of them could be re-hired as consultants at lower fees and without benefits. The potential plan is possible because of the growing number of people IBM has in India and China. The project, which IBM apparently calls LEAN is a plan to cut IBM costs by billions of dollars: "LEAN is about offshoring and outsourcing at a rate never seen before at IBM." According to the PBS reporter: "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."

Whether firing this many people and moving their functions to India or bringing some back as consultants is even possible is very tough to gauge. Issues of time zone, proximity, and morale can’t be known before hand.

IBM’s stock is flat with where it traded in early 2004. The company has about 375,000 employees worldwide. Cuts of this magnitude would be an awful risk, but it may take that to get the market to look at IBM as a grow company again.

And, if IBM moves forward, why no HP(HPQ), Yahoo! (YHOO) or Cisco (CSCO)? There could be no end to it.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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