IBM layoffs hit Vermont
By Bruce Edwards
STAFF WRITER | June 13,2013
IBM, a major cog in the Vermont economy, began handing out layoff notices to workers Wednesday at its Essex Junction chip plant and other facilities around the country.
The exact number of layoffs hasn’t been made public because IBM has a policy of not commenting on employment numbers. The state estimates that the IBM plant in Essex Junction employs somewhere north of 4,000 people.
However, IBM did inform Gov. Peter Shumlin that it was undertaking a nationwide restructuring.
“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,” Shumlin said in a statement. “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.”
Shumlin went on to say that Vermont “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.”
IBM, which is headquartered in Armonk, N.Y., issued the following statement: “Change is constant in the technology industry, and transformation is an essential feature of our business model. Consequently, some level of workforce remix is a constant requirement for our business.”
Local IBM spokesman Jeff Couture said in an email Wednesday that the Vermont plant remains an integral part of the company’s operations.
“We are actively pursuing new opportunities and believe that the long-term prospects for our business remain positive,” Couture said.
The Essex Junction plant makes computer chips for the mobile, wireless and networking infrastructure market, including smartphones.
The plant is the state’s largest private employer, and any bump up in business, or in this case downsizing, can have a ripple effect on the state’s economy beyond Chittenden County.
The layoffs didn’t catch the Greater Burlington Industrial Corp. by surprise. Its president, Frank Cioffi, said rumors of layoffs had been around for several weeks.
Cioffi said numbers were being bandied about Wednesday but nothing that could be substantiated.
He said there was no way to underestimate the economic clout of IBM in Chittenden County and the state. While the state estimates the IBM workforce at more than 4,000, GBIC puts direct employment at 5,500.
Of the approximately 100,000-person workforce in Chittenden County, IBM represents a significant number of the 11,500 manufacturing jobs in the county, Cioffi said. He said IBM accounts for 3.5 million square feet of the 16 million square feet of industrial space in the county.
The Essex plant also accounts for nearly half of the county’s manufacturing exports, he said.
Because the county and state economies are so dependent on IBM, Cioffi is always concerned about the future of the plant and its workforce, which he calls “the best of the best.”
“We always are worried about their future and their competitiveness, and then time and time again the people that work there have proven that they are the most innovative research and development folks, and design and manufacturing folks in the semiconductor industry globally,” he said. “This facility is operating at near, or has been over the past few years, at near full production.”
Vermont Labor Commissioner Annie Noonan said the state should have a better idea of the number of layoffs by today. Noonan said anytime there is a mass layoff of 25 or more workers, the employer must notify the state on the number of people effected.
Noonan’s department will help those laid off to obtain unemployment benefits but more importantly, she said, provide the resources for them to find new jobs.
With the third-lowest unemployment rate in the country at 4 percent, Vermont has many companies in need of high-skilled workers, Noonan said.
“So, I think the IBM workers, who may be affected by this, will be considered desirable job candidates for openings for other employers in the state,” she said.
She said laid-off workers can collect regular unemployment benefits for 26 weeks, with a 14-week extension for a total of 40 weeks. She said the maximum unemployment benefit is $425 a week.
Vermont was hardly alone when it came to layoffs.
WRALTechWire reported in its online edition Wednesday that hundreds of IBM workers in North Carolina were being laid off. IBM employs 10,000 in North Carolina, with 7,000 employed at Research Triangle Park, according to the technology trade publication.
The nationwide layoffs follow a disappointing first quarter earnings report that missed analysts’ estimates.