WCAX.COM Local Vermont News, Weather and Sports-Big Blue Cuts 500 Jobs

Big Blue Cuts 500 Jobs

Essex Junction, Vermont - August 18, 2003

Anxious IBMers arrived at work Monday - hoping for the best - but bracing for the worst.

The rumors had been running rampant for weeks - more job cuts at Vermont's largest private employer. Those fears became reality when Big Blue handed out 500 pink slips...and these hit engineers, technicians and managers.. NOT the production workers.

6700 people worked at IBM Burlington before Monday's cuts but it's a work force that's been dropping from a high of 8500 a little over two years ago. 500 job cuts in November of 2001 were followed by another thousand in June of 2002. Normal attrition accounts for three hundred and these latest cuts bring the work force to 6200.

"We have not seen broad-based improvement, our customers in their own markets are having difficulties that has led to a decline in demand, a decline in revenue," said company spokesman Jeff Couture.

The difficulties are hitting the semiconductor industry hard. The technology division - of which this plant is a part - posted a $111 million loss last quarter. In addition to the layoffs - the division head wrote to employees - "I have decided to implement one week without pay for employees in some operations -- including most Technology Group executives and me."

"We're hoping if we get our costs and our operations in line we can not only achieve short-term better health for our business but long term better stability and growth," said Couture.

But the more layoffs - the harder it is for IBMers - and Vermont's economy to bounce back.

Jeff Mongeon was supposed to close on a house tomorrow, but after he lost his job this morning he had to cancel.

"It's happened twice before and it's just a lousy feeling," Mongeon told Channel 3 News. "I don't know what's better, going out the door yourself or watching one of your good friends go."

He says he's upbeat about his prospects and feels worse for his colleagues who have children to take care of. But he adds, everyone knew it was coming.

"You see a lot of people sitting around. You know that's eventually gonna catch up to the company and it did and I think we're probably lucky to avoid layoffs as long as we did," said Mongeon.

Those who were affected will stay on the IBM payroll through October 17th. After that they get a severance package of one week's pay for every six months worked. They also get some medical benefits and career counseling services.

Couture would not guarantee that this is the last of the job cuts.

Caroline Allen - Channel 3 News