Vermont Business Magazine IBM officials have told Governor Peter Shumlin that its Vermont plant will be part of a sweeping workforce reduction, with cuts at many of its plants in the United States and Canada. According to a statement from the governor, the number to be laid off in Vermont was not disclosed. IBM has not been revealing its number of employees at the plant based in Essex Junction. Its last report to Vermont Business Magazine was 5,000. But a union official recently told the Burlington Free Press that it was under 4,000. In that Free Press article in May, the union official said layoffs were coming. IBM had announced a $1 billion restructuring in April, which prompted much of the talk of impending layoffs.
Governor Shumlin said in a statement issued Wednesday morning: "We heard from IBM today that sites around the United States, including the Essex facility, will be notified of a workforce reorganization that will result in layoffs. I am always concerned when we learn that Vermonters face job losses. Our hearts go out to the affected workers and their families, and I pledge my administration's resources to help their transition. The Vermont Department of Labor has mobilized its rapid response team and is prepared to assist all laid off workers.
"Vermont's partnership with IBM is very important, but our state is not immune to the forces that are driving this decision in the larger organization. IBM has assured us that it remains committed to Vermont. It will continue to invest in new and transformational opportunities that will lead to higher value for the company and its workers here. Job losses are always hard, but it is important to remember that Vermont currently has the third-lowest unemployment rate in the country. Many employers in Vermont are ready to hire those with the skills and education of these workers. We will work hard to maximize the Vermont job opportunities for those who face these layoffs."
Lieutenant Governor Phil Scott dons a clean suit as he works at IBM Burlington last summer.
Shumlin, also sensing pending layoffs, told a business group in June that the Vermont economy was well prepared to absorb potential job losses at IBM because so many local companies were having a difficult time filling technical positions.
MyWebGrocer in Winooski is one such employer (SEE STORY).
The comment section of the IBM employees Web site www.endicottalliance.org/jobcutsreports.php, which is affiliated with the Alliance@IBM/CWA Local 1701 union, blew up Tuesday as employees started posting both the news that some workers had been RA'd, as they call it ("resource action" as IBM calls it) beginning on June 11 and anticipating that the general layoffs would start on June 12, which Governor Shumlin confirmed.
IBM was expected to layoff workers across the board following the posting of its first quarter results on May 1 (SEE BLOOMBERG STORY). For the first time since 2005, IBM missed its quarterly earnings projections. Shares of IBM fell in the days following that news and were down slightly on June 12 as news of the layoffs was confirmed (http://finance.yahoo.com/q?s=IBM).
The exact number of Vermont workers to be laid off is not clear. IBM, presumed to be the largest for-private private employer in the state with more than 4,000 employees, stopped releasing data on employee numbers in 2010.
Fletcher Allen Health Care in Burlington, a non-profit, is the largest non-governmental entity in the state with 5,200 employees.
The Alliance@IBM, a website of the IBM employees union CWA Local 1701, reports that 121 jobs have been cut from the STG Storage Systems Development group ‘but those layoffs are not necessarily restricted to Vermont. Job cuts are being reported on the Alliance website from Ohio, Chicago, Massachusetts, Canada and other sites, including Vermont.
Jobs have been cut in the systems technology, global business services and software groups, according to Alliance national coordinator Lee Conrad. But he expects to hear of other affected groups throughout the day.
Citing competitive reasons, IBM spokesperson Jeff Couture said the company does not publicly discuss the details of its staffing plans. The company reported lower-than-expected quarterly earnings in April.
‘IBM keeps this between IBM and their employees,’said Lawrence Miller, secretary of the Agency of Commerce and Community Development. He said the number of layoffs apparently is not enough to trigger the federal WARN Act.
The WARN Act requires companies with more than 100 employees to give at least 60 days notice of a layoff before taking any of the following actions: closing a facility of 50 or more workers, discontinuing an operating unit of 50 or more workers, laying off 50 to 499 workers (if those layoffs comprise one-third of the total work force at a single employment site), or laying off 500 or more workers at a single site.
Annie Noonan, commissioner of the Vermont Department of Labor, said she was advised of the layoffs this morning through the governor’s office. Noonan said she was not aware of whether employees were being given notice before being instructed not to return to work.
Gov. Peter Shumlin’s press secretary released a statement Wednesday morning about the announced layoffs: ‘Our hearts go out to the affected workers and their families, and I pledge my administration’s resources to help their transition,’he said. ‘Vermont’s partnership with IBM is very important, but our state is not immune to the forces that are driving this decision in the larger organization. IBM has assured us that it remains committed to Vermont.’
Earl Mongeon works the night shift on the manufacturing line at the facility near Burlington. ‘They cut some managers and jobs yesterday in Burlington. And then last night some people on my work shift were called into office and let go,’he said.
State response
Miller stressed that the state’s exclusive focus is to support the individuals affected by the cuts, ‘however many people it is.’Unfortunately, the state had plenty of practice responding to layoffs through the ‘Great Recession,’Miller said.
Noonan said the state’s unemployment claims staff is ‘on high alert,’with cross-trained staff ready to help handle a higher volume of calls.
Even more critical, she said, is the work force development division’s Rapid Response Team. Experts from the agency give presentations to laid-off workers, either on location or near the employment site, to apprise them of their options for unemployment compensation, dislocated worker benefits and opportunities for retraining and work placement.
IBM does not appear in Vermont Joblink’s database of WARN layoffs, which dates back to 2003. The company reportedly employed as many as 8,000 workers at the Essex Junction plant more than a decade ago. Significant layoffs in 2009 and a smaller round in 2010 chipped away at its ranks.
State officials remain optimistic.
‘We expect the Essex Junction facility will be part of Vermont’s economy for a long time,’Miller said.
Noonan was similarly hopeful about both IBM’s commitment to Vermont and the laid off employees’prospects for new job placement.
Couture declined to discuss specific plans for the company’s investment in Vermont. A prepared statement reads, ‘IBM is investing in growth areas for the future: Big Data, cloud computing, social business and the growing mobile computing opportunity.’
Couture added that the Essex Junction facility’s product offerings remain strong, the microchips produced there being geared toward mobile, wireless and networking technology, including smartphones. ‘They’re aimed at high-value market segments of the industry,’he said, pointing out that many of the world’s largest consumer electronics brands use chip technology produced in Vermont.
Noonan said this specialty leaves laid-off workers with valuable skills, ‘The IBM work force, which is a very highly respected and well trained work force, will be highly attractive to many employers,’Noonan said.
The Labor and Commerce departments conduct a daily ‘job inventory’with companies to assess new job openings and recruitment issues. Noonan said her agency does have an inventory of job vacancies, and that their counselors work one-on-one to match people to openings.
Sagging morale
Morale is not so high among employees, however ‘both those laid off and those who will remain at the plant for now. Mongeon described a long process of attrition. He’s been with the company for 35 years, and works with the Alliance as a union organizer.
‘It’s like the bully at the school yard,’Mongeon said. ‘He comes one day and take takes your lunch money, he comes the next day and takes your lunch, he comes the next and takes something else.’
Mongeon said his pension was frozen in 2008, and last December the company announced that it no longer would be matching employees’retirement savings contributions on a monthly basis.
‘They will still match it, but they won’t contribute anything till the end of the year,’he said. ‘So in the meantime, you don’t get any market gain from the money you would be earning in your 401(k) if they were matching monthly.’
Mongeon assumes that workers laid off during the year will not receive a pro-rated retirement contribution upon their departure, but that could not be confirmed or denied with IBM.
‘There’s really not a future for people who want to build a career there,’he said.
IBMers commonly refer to the Vermont plant as BTV, after the Burlington airport's code letters. GTS refers to IBM Global Technology Services. STG is Systems & Technology Group. ASIC is application-specific integrated circuit, typical of the foundry work IBM does at its Essex Junction plant.
Some of those comments include:
Comment 06/13/13: http://www.lohud.com/article/20130613/NEWS/306130074/IBM-officially-noti...
IBM officially notifies state of 697 layoffs in Dutchess
IBM has officially informed the state Department of Labor that it is laying off 697 people at its Hopewell Junction and Poughkeepsie plants.
The number was listed in a Worker Adjustment and Retraining Notification posted Thursday on the Department of Labor’s website and matches figures given late Wednesday by Dutchess County Executive Mark Molinaro.
The letter does not cite any layoff numbers for the Armonk-based company’s locations in Westchester County, where on Wednesday workers also reported layoffs.
IBM’s WARN letter cites economics as the reason for the dislocation, noting that 369 workers are affected at Hopewell Junction, where the layoff date is listed as Sept. 10.
The WARN letter also mentions that 328 employees are affected at a Poughkeepsie plant, but does not specify those workers’layoff date.
Under state law, companies with more than 50 employees must warn New York state 90 days in advance if they are laying off 33 percent of their workforce or 250 workers from a single site.
IBM’s WARN letter was dated Wednesday but did not appear on the state’s website until Thursday. -Anonymous-
Comment 06/12/13: I was notified that I'm part of the "extensive restructuring" in the ASIC organization. I'm a remote employee in the Boston area, working out of the BTV site. Glad I'm not up in VT these days. -GreenerPastures-
Comment 06/12/13: I was RA'd today from STG Burlington with 31 years of service. -Vermonter-
Comment 06/12/13: STG Vermont affected today. Standard 30 day notice, 1 week pay per 6 months up to 6 months pay... Haven't read the packages just sent. -Hit Today-
Comment 06/12/13: News announces layoffs at IBM Essex Jct. Vermont so far 120, more to happen today. -Anonymous-
Comment 06/12/13: In ITS ( Canada ) going in for my RA at 9:30 EDT. Hope it is a pleasant experience. Will post when its done ~ all the best to those in the same postion. -Anonymous-
Comment 06/12/13: OUTTA HERE. RA'D. IBM-BURLINGTON MD ADMIN -Anonymous-
Comment 06/12/13: I work in STG in 3D Edram Development and was informed of permanent layoff today. -Anonymous-
Comment 06/12/13: The hammer has fallen, google shows Raleigh already knows of cuts and more is coming as the day goes on. -lifer-
Comment 06/12/13: Today is the day. Expect over 1000 impacted across US mostly STG.ASIC and ISC hit hard. Managers and execs included. -Anon-
Comment 06/11/13: Some 2nd Shift mfg managers in BTV notified last night. -Anonomys-
Hilary Niles of vtdigger.com contributed to this report.