IBM cuts 1,000 chip-making jobs

IBM is cutting 1,000 chip-making jobs in the U.S. because of a slowdown in the demand for semiconductors, the company said today.

Bill O'Leary, spokesman for IBM's Microelectronics Division, said management as well as nonmanagement positions would be cut. He said the division has 21,500 employees worldwide, and 85 percent to 90 percent of those are in the U.S.

He said the cuts, which were announced to employees today, would be made across the board, mainly at plants in Burlington, Vt., and Endicott and East Fishkill, N.Y.

O'Leary said some employees would have the opportunity to look for jobs elsewhere in IBM, but the bottom line was that 1,000 workers would be let go.

IBM reported a 17 percent decline in its third-quarter 2001 earnings, from US$1.08 per share in the third quarter of 2000 to 90 cents per share in the third quarter of 2001. When it released its earnings figures, IBM cited the weakness of its microelectronics division.

"We take this very seriously, but our cuts are less than our competitors who have announced tens of thousands of job cuts," O'Leary said.

O'Leary said line-production employees would suffer the fewest cuts because they had already experienced cost reductions earlier this year including reductions in overtime.

Despite the job cuts announced today, O'Leary said IBM as a whole hired an additional 27,000 workers this year and was proceeding with plans to build a new chip plant in East Fishkill. The plant is scheduled to be running at full tilt by the first quarter of 2003.

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