While IBM employees brace themselves for yet another round of layoffs, Vermont Labor Commissioner Annie Noonan is calling for better notice and more authority over such “workplace actions.”
Big Blue has been downsizing its workforce in North America for years, though it usually doesn’t announce specific numbers and couches it in terms of its expected cost savings. IBM’s union, Alliance@IBM, is expecting roughly 15,000 workers to be cut at Big Blue’s manufacturing plants in Vermont and New York around Feb. 26.
Vermont Warns IBM
The federal Worker Adjustment and Retraining Notification Act, known as the WARN Act, however, requires employers to provide notice 60 days in advance of covered plant closings and covered mass layoffs. It’s designed to help workers and communities prepare.
Noonan told VTDigger.org that WARN notices apply only to large companies by Vermont standards and don’t provide adequate time to prepare.
“Not to pick on IBM,” Noonan said of previous layoffs, “(but) we were getting calls from the town manager, the superintendent of schools, people who have to plan around the community.”
The state’s Labor Department needs to know how much its Unemployment Trust Fund will be tapped and the depth of assistance it will need to provide residents, Noonan said.
Vermont’s efforts to gain more information in 2013 included a public challenge from the governor, which prompted IBM to finally disclose that it cut 419 workers at its Essex Junction plant in June.
Under the WARN act, companies are only required to notify state officials if the layoffs will affect 500 or more employees, or represent a third of the workforce if the cuts will touch 50 to 499 workers.
But Vermont house bill H.758 calls for requiring a 90-day notice for companies that plan to lay off more than 20 employees. It would also require back pay for aggrieved employees and civil penalties capped at $5,000 per employee.
Other states could be clamoring for more transparency from Big Blue as well.
At a rally in New York Assemblyman Kieran Lalor, R-Fishkill, called for clawbacks for companies that receive public money but fail to maintain the number of jobs promised.
Interestingly enough, after climbing to a three-year high in 2012, tech layoffs declined by 32 percent in 2013 as companies focused on growth areas such as Big Data, cloud computing and security, according to global outplacement firm Challenger, Gray & Christmas.
IBM’s $1 Billion ‘Rebalancing’
IBM, however, cut more than 3,500 jobs in North America last year, including about 700 in Dutchess County, N.Y., and 203 workers in Silicon Valley – numbers gleaned from documents filed with the State of California. IBM has about 400,000 employees total in more than 170 countries.
The company got in trouble with the Department of Justice – and agreed to a settlement in September — over online job postings allegedly stating a preference for F-1 and H-1B visa holders.
And after a disappointing earnings report last month, IBM committed to a $1 billion cost-cutting move and “rebalancing” of its workforce. That could mean as many as 13,000 jobs, according to Bernstein Research analyst Toni Sacconaghi, though Alliance@IBM puts that closer to 15,000.
IBM’s sale of its x86 server unit to Lenovo could move some 7,500 workers to the Chinese company’s payroll. Lenovo has said it will extend offers to those workers – though that could take months, WRAL TechWire points out, wondering whether they will be cut in the meantime.