IBM blames lay offs on international markets

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(Host) IBM, Vermont’s largest private employer, cut 500 jobs on Monday. IBM blamed the layoffs on a worldwide slump in microchip sales.

VPR’s John Dillon reports.

(Dillon) IBM says the job cuts are in response to the basic economic laws of supply and demand. The company’s technology division, which designs and manufactures microchips, lost $110 million in the second quarter as demand slowed for their products.

Spokesman Jeff Couture says there’s nothing the state could have done to save the 500 jobs.

(Couture) “These layoffs are really the result of the broad and global economic factors affecting our chip business, which are factors affecting other businesses as well. The state has been as supportive as they can be.”

(Dillon) The job cuts affected engineers, technicians, chip designers, support staff and administrators. Couture says employees on the manufacturing line did not lose their jobs.

Outside the IBM plant in Essex Junction, workers drove away with bad news.

(Tom Bruno) “I put all my hopes in this place and it’s gone.”

(Dillon) Tom Bruno, an IBM technician from Colchester, lost his job Monday morning. He worked at the plant for five years.

(Bruno) “I don’t know any of the details. It’s pretty tight-lipped. It was nothing – you know, there were no performance issues, or anything like that. It was just resources.”

(Dillon) Randy Saint Amand and his twin brother Ron started work on the same day in 1977.

(Randy Saint Amand) “We carpooled together for 26 years.”
(Ron Saint Amand) “We’re carpooling in today to get terminated.”

(Dillon) The brothers say they had a good employment history and years of positive evaluations. They questioned how mangers made their choices on whose jobs to cut.

(Randy Saint Amand) “They haven’t really given us a reason for how the selection process was made. I’m interested to find out what their selection process was.”

(Dillon) Ron Saint Amand said IBM always assured employees that their jobs were secure.

(Ron Saint Amand) “It’s not something we planned on doing, being out looking for work. We thought we had a job for life. It’s what we were promised.”

(Dillon) A former IBM employee who’s now involved in a union organizing effort says that if employees had a labor contract, they would have been involved in the decision to cut jobs. Ralph Montefusco is with ‘Alliance @ IBM,” an affiliate of the Communications Workers of America.

(Montefusco) “With a union, with a contract, you cannot change things without renegotiating those changes. And of course, a layoff would include a union in the process. Right now, we call these job cuts, not lay offs. Because there’s no way – if business picks up again – there’s no way these people are going to get called back.”

(Dillon) IBM spokesman Couture says the job cuts are permanent and are designed to reduce costs for the long term.

University of Vermont economist Art Woolf is worried about what the job cuts mean for IBM’s future in Vermont. This is third time IBM has slashed jobs within the last two years. Woolf says that if the engineers and chip designers leave the state, Vermont may no longer have the cutting edge in technology.

(Woolf) “IBM is essentially saying that a lot of the high powered activity at this plant is now redundant. They’re laying off engineers. They’re laying off top management. They’re basically, I think, saying that this plant is not going to be performing at the level that it has been in the past. It’s going to be smaller and that’s something to worry about in the longer term.”

(Dillon) Besides the job cuts, IBM also announced that 3,000 workers in Vermont will have to take a week off without pay in September.

For Vermont Public Radio, I’m John Dillon in Essex Junction.

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