Supply Chain

Does the "I" in IBM Now Stand for India?

March 28, 2009

High-tech giant IBM Corp. has yet to issue an official comment, but according to the Wall Street Journal and other sources, IBM plans to cut as many as 5,000 U.S. employees, while opting to shift many of those jobs over to India. Based on the WSJ's ...

Dave Blanchard Blog

High-tech giant IBM Corp. has yet to issue an official comment, but according to the Wall Street Journal and other sources, IBM plans to cut as many as 5,000 U.S. employees, while opting to shift many of those jobs over to India. Based on the WSJ's estimates, IBM employs at least 74,000 people in India, which would be close to 20% of its total global workforce of 400,000.

IBM has long managed a significant international workforce, and according to the WSJ, even before the announcement of the 5,000 lost U.S. jobs, 71% of its employees were based outside of the United States, which of course is still where the company's headquarters are based.

Could this move to pare U.S. headcount be in anticipation of the rumored takeover of Sun Microsystems? Maybe. But an article in InformationWeek points to a potential political roadblock for IBM:

"espite some sound business reasons for offshoring, the job cuts come at a particularly sensitive time. IBM has been one of the most active tech vendors in terms of efforts to secure work funded by President Obama's multibillion-dollar stimulus package -- which largely aims to improve the nation's infrastructure while creating thousands of new jobs.

...

"Some IBM workers believe any jobs created by the stimulus package and other government programs should remain in the United States."

The InformationWeek article also speculates that the IBM may also be readying a bid to acquire Indian IT firm Satyam, which is known to be on the block.

About the Author

Dave Blanchard Blog | Senior Editor

Focus: Supply Chain

Email: [email protected]

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Contributing Editor Dave Blanchard provides the IndustryWeek audience his expertise in lean supply chain, reporting on topics from logistics, procurement and inventory management to warehousing and distribution. He also specializes in business finance news and analysis, writing on such topics as corporate finance and tax, cost management, governance, risk and compliance, and budgeting and reporting.

Dave is also the chief editor of Penton Media’s Business Finance and editorial director of Material Handling & Logistics.

With over 25 years of experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2010), and is a frequent speaker at industry events. Dave is an award-winning journalist and has been twice named one of the nation’s top columnists by the American Society of Business Publications Editors.

Dave received his B.A. in English from Northern Illinois University, and was a high school teacher prior to his joining the publishing industry. He is married and has two daughters.