IBM (IBM) will fire or is firing 5,000 US workers. The press has several reports describing how the functions of these people will be replaced. Workers in India will probably end up doing much of the work now being handled by the departing IBM employees.

The IBM reaction to the reports is that it has no reaction. When 24/7 Wall St contacted the big tech operation, it was told that the layoff issue and reaction to it could not be discussed. Although IBM will not say, its position is likely to be that it has no obligation to talk about who it hires or fires, where the people are hired or fired, and when the process goes on. As long as the number of employees involved is below the level that the SEC would deem as being “material”, IBM has every right to be mute.

A portion of IBM’s workers, informally represented by a group called Alliance@IBM says that the company actually is doing something terribly sinister and it is doing it to dupe the US government.

The logic behind the belief that IBM would like to dodge making public comments about its workforce is that Congress and the Administration would take a dim view of IBM getting any money from the new government stimulus package or additions to the US budget while at the same time undermining the tax base by firing thousands of people. The Alliance@IBM objection to the firm firing people while getting money from the federal government is an accurate opinion. What is also true is that almost no one in the government, except the Congressmen serving districts which have many IBM workers, cares about the layoffs at all. The Administration and Congress can’t do much about the issue because half of corporate America is doing exactly what IBM is. There is nothing unusual about that in a recession. In a world where nearly everyone is cruel, creating laws which mandate compassion is a poor use of time. If the government planned to withhold stimulus money from every American company that sends a job overseas, almost all of the stimulus money would stay in the Treasury. US firms have convinced nearly everyone other than their workers that they can operate more efficiently if they can have their workforces wherever they please. As unions and workers have lost their power over the last several decades, the government’s reasons for listening to them have eroded.

The IBM workers who are most vocal about their objections to the company firing people in the US and replacing them with employees overseas are, in their view, patriotic. A job lost in America is a tax dollar lost, a home that may be foreclosed on, and a local community that loses the consumer spending from a productive citizen. These same workers argue that, over the long haul, IBM hurts its customers and its shareholders by taking labor with years of experience and replacing that with labor that have weeks worth of experience. The clients will see the quality of IBM’s products and services deteriorate. IBM’s competition will consequently get an edge. Shareholders will see the value of their investment undermined. These arguments may have terrific value, but, as IBM pushed American workers out the door, there was no support for retaining these US-based employees.

Douglas A. McIntyre

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