IBM lays off 1000 US services employees

IBM is laying off close to 1000 technicians from the US division of its services unit, IBM Global Services, in part due to the completion of year 2000-related contracts, a company spokesman confirmed today.

"We've notified something less than 1000 people that their positions are being eliminated," said IBM spokesman Scott Brooks. "Some may have been working on Y2k remediation, some may not have been."

The 1000 figure constitutes less than 1 per cent of the total number of IBM Global Services employees in the US. Brooks said he expects about half of those laid off to find other jobs within the company. He said the workers, told of the layoffs last week, will have two months to find new jobs internally and will remain on the payroll during that time.

Those who don't find other jobs in the company, because they lack the skills IBM currently needs, will receive a payout based on the number of years they've worked at the company, as well as six months paid medical benefits and a $US2500 retraining allowance.

Albert Nekimken, an analyst at consulting firm Input, said the layoffs aren't significant.

"Many of them will land other jobs because they have skills that are highly sought after," Nekimken said. "Although given the tremendous skills shortage in general, (one could ask) why IBM let them go. Maybe they don't have the skills IBM needs."

IBM Global Services expects to hire between 15,000 and 20,000 people this year to set up websites and install software, Brooks said. The company has 138,000 employees worldwide in IBM Global Services and 307,000 employees overall.

The cuts were made less than a week after IBM won a $US400 million, 10-year outsourcing and technology services deal with AXA Financial, a New York-based insurance and financial services firm. Earlier this month, IBM announced it won a pair of 10-year deals valued at $US1.5 billion each from Aventis, a France-based pharmaceuticals maker, and The New Power, an energy startup in Houston.

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