IBM to furlough most U.S. hardware staff

Aug. 7, 2013 at 2:46 PM
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ARMONK, N.Y., Aug. 7 (UPI) -- Most IBM Corp. U.S. hardware and supporting supply chain employees will be required to take a one-week furlough at one-third pay, a company spokesman said.

The cost-saving furloughs must be taken beginning Aug. 24 or Aug. 31, Jay Cadmus, spokesman for the computer-services giant's Systems and Technology Group, told several news organizations.

Executives in the division will not be paid that week.

"In lieu of other options considered, this approach best balances the interests of employees and the competitiveness of the STG business," Cadmus said in a statement to Forbes, the Poughkeepsie (N.Y.) Journal and The Burlington (Vt.) Free Press.

The Systems and Technology Group has a large presence in Poughkeepsie and nearby East Fishkill, N.Y., and in Essex Junction, Vt., near Burlington.

Cadmus -- who did not respond to a request for comment from United Press International -- told the news organizations IBM would not say how many employees were affected by the furloughs.

The Armonk, N.Y., company employed 434,246 as of Dec. 31. IBM doesn't disclose the number of employees by country or by division.

IBM has done furloughs before, Cadmus said.

"This measure is one of many that we are taking as we return to a sustainable, profitable business model," Cadmus said in a statement quoted by Forbes.

STG makes servers, storage systems and microelectronics. Its Integrated Supply Chain organization, which supports STG, is involved with procurement and logistics.

The Alliance@IBM employees' union group said in a statement the furlough, following cuts of more than 3,000 U.S. and Canadian employees, was "the latest slap in the face" to workers.

"Billions of dollars in IBM stock buybacks but not enough money to pay workers throughout the year? Not enough money for pay raises?" the union group's statement said. "Time to say enough to CEO Rometty!"

IBM Chairwoman and Chief Executive Officer Ginni Rometty said last month the company's "higher-value software and mainframe businesses" delivered "strong performance" in the second fiscal quarter, but "going forward," the company would continue "taking action in the areas that are not performing."

IBM took a $1 billion "workforce re-balancing" charge in the second quarter.

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