Fears grow for IBM jobs at Greenock despite 8.7% rise in profits

Published on Saturday 13 February 2010 12:40

HUNDREDS of IBM employees at Greenock have been put on alert that the company plans to cut jobs despite recording increased profits.

Until now job losses have centred on the United States where 5,000 staff were laid off last year, mostly affecting its services division and senior management.

But the technology giant confirmed that it is embarking on a "process of consultation" with staff throughout its facilities in Britain. It added that it would be inappropriate to discuss the matter further until that period was over.

One source close to the firm said the formal redundancies consultation process starts on 23 February and will last for 90 days. "This has come out of the blue and is a total shock and from a work perspective we already struggle to get work done with the people we have." He added that feelings were already running high within the company after IBM recently scrapped its final-salary scheme for long-serving employees who take early retirement.

Last month the move prompted a heated Commons debate when IBM was described as "shoddy" for the way it had treated its employees over their pensions.

Inverclyde MP David Cairns described the move as "redundancy on the cheap" and claimed that more than 70 people within IBM Greenock had been forced out the door to date.

Cairns and three other MPs with IBM plants in their constituencies recently met company executives, who claimed that IBM UK and Ireland suffered from a relatively poor performance. The current uncertainty contrasts with a little over a year ago when Scottish Enterprise announced plans to spend 1 million to boost research and development at the Greenock plant, a move designed to help staff develop cutting-edge software and protect their jobs.

At the time Enterprise Minister Jim Mather, himself a former IBM employee, described it as a lifeline for the plant, which employed 2,000 people, and praised the facility which had showed it could adapt to new challenges.

IBM has had a presence in Greenock since 1951 when it established a manufacturing plant at Spango Valley. Nowadays staff at the plant's international call centre answer IT and computer queries from all over the world.

Last month IBM announced fourth-quarter results with increased profits though its annual sales slipped back below the $100 billion (63.7bn) mark.

Profits increased by 8.7 per cent from $4.43bn to $4.81bn with the company then predicting that full-year profits would be ahead of expectations.

The quarter marked the first increase in IBM's revenues since September 2008. The company's finances have become more consistent since it spun off or sold several divisions, including its PC division, taken over by Lenovo of China.

For the full year, 2009, IBM's net income grew 9 per cent to $13.4bn with revenues falling by 8 per cent, or 5 per cent adjusting for currency, to $95.8bn.

At the time of the annual results IBM's chief financial officer Mark Loughbridge said: "We do see some encouraging signs in our business, but I'd like to get into the first quarter and get a little more validation this is an ongoing recovery before we take this up further than we have."

He said IBM policy centred on continuously evaluating the firm's mix of skills and resources and making changes as needed. Managing resources this way kept the company competitive as it adapted to the evolving needs of clients, he said.