Hardware News

Union fears IBM job cuts could hit UK first

Dan Ilett and Graeme Wearden ZDNet.co.uk

Published: 05 May 2005 13:50 BST

Britain's second-largest trade union fears that UK workers at IBM will be the first to be axed as the IT giant gears up to cut up to 13,000 jobs, mostly in Europe.

Amicus, which has more than one million members, said that it is cheaper and easier for IBM to make redundancies in the UK than anywhere else in Europe.

"We've called it a slash-and-burn reaction to poor first quarter results," said a spokesman for Amicus on Thursday morning. "We fear the worst as it's considerably easier to get rid of workers in the UK than in the rest of Europe."

IBM said on Wednesday that employee reductions will include both layoffs and voluntary departures. The majority of the cuts will be in Europe, where the company has initiated discussions with unions.

The reorganisation involves the streamlining of management in Europe. IBM said it will eliminate its pan-European management layer to reduce internal bureaucracy.

Ian Wesley, Ovum research director, believes that the bulk of the job losses will occur in France, Germany and Sweden, and pointed out that the IBM's recent financial results for the UK were "fine". Media reports predicting IBM job losses have appeared in France, Germany and Sweden in recent weeks, which Wesley believes were sparked by discussions between IBM and local worker councils.

Wesley also warned that IBM's move could have wide implications, possibly impacting suppliers and other companies to which IBM has outsourced some services.