IBM Corp. said on Wednesday that it will eliminate about 1,000 jobs at several of its U.S. chip manufacturing, storage and development plants.
Sluggish sales and falling revenue tied to an industry-wide slowdown spurred the cuts, an IBM spokesman said. Last month, company executives reported that microelectronics sales had declined 30 percent from a year earlier, and that it expected revenue to remain depressed through the next quarter.
"We like everybody else are feeling the effects of the downturn in the industry," said William OLeary, spokesman for IBMs Microelectronics Division, in East Fishkill, N.Y. "Weve fared better than most, by evidence of the fact that we have not had to do any major job actions until today. Even these job cuts, while we dont want to minimize them, arent like the tens of thousands of layoffs weve seen at our competitors.
The layoffs amount to about 4.7 percent of the computer makers Microelectronics Division, which employs about 21,500 workers.
Despite the cuts, OLeary said IBM will close out the year with slightly more employees that it had back in January, with its worldwide workforce totaling about 320,000.
IBMs manufacturing plant in Burlington, Vt., will bear the brunt of the cutbacks, with about 500 of 8,300 employees receiving pink slips. IBM chip-packaging and circuit-board manufacturing facility in Endicott, N.Y., will be the next hardest hit, with 400 of 5,500 workers slated to lose their jobs.
Other workers will laid off at IBMs chip making plant in East Fishkill and the companys design and development labs in Raleigh, N.C., Rochester, Minn., Fremont, Calif., and Boulder, Colo.
Despite the planned cuts, IBM remains committed to opening a new chip making facility in East Fishkill scheduled to begin operations in August 2002. The plant is expected to employ about 1,000 workers once it begins full production in 2003.
"We remain bullish on the future," OLeary said, contending the company has worked to avoid larger cutbacks to assure it retains a strong position when the industry recovers.
"Some of our competitors have not only done more significant layoffs, but theyve also shuttered plants and canceled plans for new facilities. We have not," he said. "We have the new fab being constructed in East Fishkill, and that is on track. We believe that this is the right strategy for the long term."