500 lose jobs, 3,000 furloughed at IBM

AUG. 18–ESSEX JUNCTION, Vt. — Five-hundred people were laid off at IBM Monday and another 3,000 will have to take a week off without pay next month from the state’s largest private employer.

Company spokesman Jeffrey Couture told The Associated Press that layoffs would take effect immediately. The unpaid leave would take place in September, Couture said.

“Essentially we’re doing this because we have not seen a turnaround in our industry,” Couture said. The company was “reacting to a decline in our industry, who themselves are reacting to uncertain conditions.”

The jobs being cut were in some of the higher-paying positions at the plant, but neither the layoffs nor the payless week affected the manufacturing work force, Couture said. The plant spanning the Winooski River in Essex Junction and Williston makes high-speed computer chips and semiconductors, which also are researched and designed there.

IBM employed slightly fewer than 6,700 people in Vermont before Monday’s layoffs; companies employing thousands more rely on contracts and business from IBM.

The microelectronics business has had a sharp downturn and IBM lost money on it in the second quarter, even though the corporation as a whole posted earnings, according to people who follow the company.

Many people at the plant had been expecting bad news but it still struck some hard.

“I love Vermont. My kids have grown up here,” said Tom Bruno of Colchester, a technician who moved to the area 10 years ago after working 11 years in other IBM operations.

Bruno, one of those laid off, said he understood that IBM was having a tough time in the competitive industry. “It’s the chip industry. It’s so cyclical,” Bruno said as he left the plant after the layoffs were announced.

Another worker, Rick Schwartz of Milton who works in supply, was more philosophical about the severance package he and his other laid-off colleagues would be receiving.

“It gives me an opportunity to move to Florida,” Schwartz said.

Those being laid off will remain on IBM’s payroll for 60 days and will be provided with career counseling services, Couture said.

Gov. James Douglas said last week he had no advance notice of developments at IBM, but he suggested he was expecting job cuts.

The job cuts at IBM are just the latest bad news at the company. Late last month IBM said it was cutting the number of hours worked for about 2,400 workers.

Last year the company laid off 988 workers at the Essex Junction plant as part of a broad restructuring of the Microelectronic Division, which designs and produces microchips.


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