IBM, India, cuts

IBM to hire 14,000 in India, offsetting cuts elsewhere

25 Jun 2005 | (News)

US tech giant IBM plans to increase its payroll in India this year by 14,000 workers as it cuts up to 13,000 jobs in Europe and the US, a labour group said yesterday.

The move, first reported by The New York Times, highlights the transfer of some skilled jobs to low-wage countries such as India by a number of companies including IBM, the world’s largest information technology company.
The moves in India were indicated in what was claimed to be an internal company document posted on the website of the Washington Alliance of Technology Workers, of Washtech, which seeks to unionize high-tech workers.
It indicated IBM’s Indian workforce would rise to 38,196 in 2005 from 24,150 in 2004.

IBM declined to comment on the document or specific workforce levels. But company spokesman Edward Barbini said IBM is increasing its staff in high-growth countries such as India to meet increasing demands.
“IBM India has seen double-digit growth in the last five years,” Barbini said. “In 2004, IBM India recorded revenue growth of 45%. We ended December 31 with roughly 23,000 employees in India making IBM India’s sixth largest IT employer.”
Barbini offered no specifics on increases in Indian hiring, but noted that the company has announced it would hire 1,000 programmers for a new software center in Hyderabad.

“India, China and Brazil are high-growth markets for IBM and we are hiring to support our local growth in those markets,” he said. “There is a rapidly growing demand for business transformation services.”
Washtech said the moves were hurting workers in the US and elsewhere.
“IBM is really pushing this offshore outsourcing to relentlessly cut costs and to export skilled jobs abroad,” Marcus Courtney, president of Washtech, said.

“The winners are the richest Corps in the world, and American workers lose.”
According to Washtech, the document titled “India 2002 to 2005,” shows a rapid increase of hiring in India from 6,070 employees in 2002.
The job-cutting by IBM, estimated to include 10,000 to 13,000 positions, has drawn protests from labour organisations in the US and Europe.
The computer giant announced the reductions in May and said the majority would occur in Britain, Germany, France and Italy.

Europe accounts for about one-third of IBM’s global work force of around 300,000.
Markets expected some kind of restructuring from IBM after the first-quarter earnings figures jolted the company to hasten a review of its strategic direction.
When IBM reported first-quarter results in April, chief financial officer John Loughridge said the company was showing “continuing strong growth in emerging countries,” with combined sales in India, China, Brazil and Russia reaching $1bn in the period.

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