IBM has begun consultations with staff in Ireland on a series of voluntary redundancies that could see up to 200 staff leave the company.
A spokesman yesterday could not comment on how many jobs would be lost as a result.
The move comes as IBM completes the transfer of its high-end server manufacturing from its Dublin Technology Campus to Singapore. Although not specifically targeting those workers, the package is likely to appeal to staff in the hardware unit. IBM’s Dublin operations have shifted focus in the last five years from manufacturing to software and services.
"IBM announced in 2009 its plans to move its high-end server manufacturing and fulfilment operations for Europe, Africa and Asia to Singapore. This change provides a more strategic location for manufacturing operations, placing us closer to our growth markets and suppliers, and giving us greater operational efficiency and cost savings," the company said in a statement today.
It said the IBM Technology Campus in Dublin would continue to manufacture low-end and mid range power-based systems.
Last month, IBM said it would create 200 jobs at its Mulhuddart site over the next three years with the establishment of a €66 million technology centre focused on the needs of cities in the future. Both that project and a €25 million expansion of its software labs in Dublin, Cork and Galway last year creating 100 jobs, have received the backing of IDA Ireland.
In February 2009 IBM announced it was seeking 120 voluntary redundancies following the decision that its high-end server manufacturing would move to Singapore. This was because the growth markets for these products is in Asia.
The move of those production lines to Singapore has now been completed. Low-end and mid-range server manufacturing and fulfilment for markets in
Although workers from the manufacturing side of the business will have the option to transfer to the new software and services businesses, many of them may not have the required skills. The IBM spokesman pointed out that the company is continuing to hire for roles in sales and software development. The move to seek voluntary redundancies will not have any impact on IBM’s net total workforce in Ireland, which stands at about 3,400.
Responding to the news, Fine Gael's Leo Varadkar called on IBM to avoid compulsory redundancies.
The party's employment spokesman, who is also a local TD, said it was a "huge disappointment" for IBM’s staff and Blanchardstown and urged IBM to provide a comprehensive redundancy package and retraining.
“This development once again underlines the urgent need for a Government jobs and competitiveness strategy. Brian Cowen is obsessed with fixing the banking system and closing the budget deficit, at the expense of everything else," Mr Varadkar said.
On Monday night IBM reported better than expected first quarter results and raised its guidance on its full year figures. The latest company whose financial results point to a recovery in the technology sector, IBM said customers had increased spending on software and consulting services.
IBM’s first-quarter profit rose to $2.6 billion (€1.94 billion), or $1.97 per share, compared to $2.3 billion, or $1.70 per share, for the same period in 2009. Revenue rose 5 per cent to $22.9 billion from $21.7 billion, accelerating from a 1 per cent year-on-year gain in the previous quarter. Wall Street had forecast revenue of $22.7 billion. The company raised its 2010 earnings per share target to “at least $11.20” from a previous outlook of “at least $11”.
Additional reporting: Reuters