IBM Cuts 988 Jobs in Vermont

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(Host) IBM cut 988 jobs at its Essex Junction Microelectronics plant Tuesday. It’s one of the single largest job cuts in the state’s history.

VPR’s Neal Charnoff reports.

(Charnoff) The announcement came as no surprise to IBM’s Essex Junction employees. IBM shed thousands of workers across the country in the last few weeks in an effort to streamline the company. IBM Chief Sam Palmisano said last month that adjustments in its computer-chip making operations were on the horizon. IBM spokesman Jeff Couture says that after today’s cuts, no more layoffs are imminent and the company can now focus on the future:

(Couture) "The job cuts are part of a realignment of a of our microelectronics business to…designed to improve efficiency and streamline the business and the focus on the growth opportunities. So we’re moving on from here…. Now that we’ve made the cuts to develop those parts of the business that we think are going to be successful and that’s what our focus is going to be."

(Charnoff) Couture says that local factors did not play a part in the company’s decision. He adds that the Essex Junction facility is here to stay, putting to rest rumors that the plant might close.

(Couture) "Certainly this facility in Vermont is here and it’s going to remain here. We are focusing on developing a new technology service business. We are focusing on expanding on what we call foundry manufacturing, which is in our case making chips for companies who design chips but don’t have their own facilities and some of the skills needed to make them. We’re gonna focus on some specific logic type of chips…. That’s all gonna be done here and the facility here is still very much key to IBM’s technology business."

(Charnoff) IBM is Vermont’s largest employer, and had about 8000 workers before this latest wave of cuts; 475 workers were let go at the Essex Junction site in January. No manufacturing jobs were lost in Tuesday’s round of cut backs.

This cut comes on the heels of last week’s announcement of the addition of 200 manufacturing jobs at the Essex Junction facility. The company says that some of those jobs will be offered to employees who were given pink slips today. These manufacturing jobs pay significantly less than those that were cut today.

Vermont State Economist Jeffrey Carr says the IBM job cuts will have a serious ripple effect on Vermont’s economy:

(Carr) "We’re talking about a job impact over the next two or three years that’s going to build, it’s going to accumulate. And it could approach the 3,500 to 4,000 job range if we sort through and find out just what the pay level of these jobs are. It’s much higher than the state average, so that has a higher than your typical state job impact, indirect impact on the economy as well, and those things ripple through the entire economy of the state of Vermont."

(Charnoff) Carr predicts that the psychological effects of the job cuts could be as damaging to the state as the economic realities.

(Carr) "It clearly is a tragedy for the families that have been affected by these job reductions, and beyond the numbers, I think this has a diminutive affect on the collective psychology of all Vermonters. If it can happen at IBM…. What’s happened in the last six months at IBM hasn’t really happened in 50 years in our economy. And so the psychological effect, the concern, the understandable concern on the part of a lot of working Vermonters and their families that well, if it happens at IBM…could it happen to me? It’s the type of thing that we’ll only know, maybe we won’t know that well, what true magnitude of the impact of these reductions over the last six months have been for a number of years."

(Charnoff) Although most of the affected IBM workers left their jobs Tuesday, the terminations are officially effective on August 5. Federal law requires that employers give 60 days notice when they cut more than 500 jobs.

For Vermont Public Radio, I’m Neal Charnoff.

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