IBM continues trend of outsourcing technology jobs

IBM's plant in Poughkeepsie, NY. Source: Andrea from

By Brendan Sherwood

IBM announced last Thursday that it would cut about 5000 employees from its Global Business Services Unit and transfer their jobs to India. The announcement has created unrest in the industry because of the troubled economy and job market.

According to Time, labor costs for American workers have been falling and there is a trend of American technology workers losing their jobs. In addition, according to BusinessWeek, the cuts come at an odd time because Congress just passed a $787 billion stimulus package, hoping to create jobs for Americans.

A group called Alliance@IBM is seeking union representation at IBM. Its leader Lee Conrad said the recent layoffs are “all about greed.” According to Businessweek Conrad said, “They’re moving work offshore to pay lower wages and lower taxes. IBM shouldn’t have their hands on stimulus money if they’re offshoring work.”

Some are afraid outsourcing will continue to be a problem for the IT industry. According to ComputerWorld, the latest layoffs continue a trend at IBM as its U.S. workforce declined 5% last year but its workforce in Brazil, China, Russia and India grew 15%.

Stephen Cole, executive director of career services at Marist College, said he hasn’t come across any of the problems with outsourcing that are are in the news. He also commented that people like Lee Conrad are “pushing an agenda.”

IBM is not the only technology company currently cutting jobs. According to the Associated Press, Hewlett-Packard is cutting 24,600 jobs, 8 percent of its work force. Microsoft said in January that it would cut 5000 jobs, the first mass layoffs in the company’s history. Google also plans to lay off about 200 employees in marketing and sales.

Stephen Cole said large employers like IBM are still looking for jobs in finance and IT because they “want to have a presence to meet future needs.” An example of this is the Marist College career fair this Thursday, which will have about 50 employers.

Cole said, “It’s not harder to get an IT job, but the student may need to be more proactive. Companies like IBM are more selective in skills and the educational caliber of the student.”

However, he also said that some companies have been trying to fill IT positions at Marist College for the first time recently.

Poughkeepsie is one of the many areas affected by IBM’s latest announcement. According to The Poughkeepsie Journal, it is possible that IBM will cut 54 local jobs but the company has not released any official information. During IBM’s last round of layoffs in January, about 900 Dutchess County IBM employees lost their jobs. IBM has plants in East Fishkill and Poughkeepsie.

Stephen Cole received an e-mail Monday morning from IBM saying it had “hired annual requirements for internships” from Marist College. This includes one position now, two over the summer and one in the fall. Cole said all segments of the market have limited hiring and are being more selective than in the past because of the economy.

Marist College IT major Andrew Natale is not worried about IBM’s recent layoffs because “there are a lot of other companies hiring in the area, like Morgan Stanley.”

He is more worried about outsourcing in general but said that his classmates are still finding internships and “currently IT and IS has more jobs available out there than other fields such as business because no matter what happens, computers are necessary.”

Chart showing possible outcome of IBM's outsourcing. Source: Patrick Thibodeau, Computerworld


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