Faced with criticism over offshoring jobs to India and other developing countries, IBM Corp has adopted new internal transfer policies aimed at filling vacant positions in the company with workers who would otherwise get a pink slip.
IBM employees, whose work is sent abroad, are expected to take a 'comparable job', which may be at a lower pay and a low employment classification, The Wall Street Journal reported quoting the company's internal policy documents.
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If workers do not take the 'comparable job', they are fired from the company, it said.
Company vice president (learning) Ted Hoff would not say how many fewer layoffs he expects this year, but a person familiar with the plans said around 2,000 US workers would lose their jobs to offshoring -- down from 3,000 IBM predicted in January, it said.
Further, with the US economy starting to recover, IBM is increasing employment for the first time in three years.
Earlier this year, the company said it expected to boost worldwide employment by 15,000 to 330,000 in 2004, including a net US employment boost of up to 2,000 despite offshoring, the report said.
IBM said it expects the new policy will save money overall by reducing costs associated with hiring and firing. Moving an IBM worker would be 20 to 30 per cent cheaper in the first year than hiring an outsider, the Journal said quoting a company spokesman.
IBM is not unique in trying to mollify its work force, said Stephanie Moore, an analyst with market research firm Forrester Research in Cambridge, Massachusetts.
"More companies that send jobs to India or elsewhere are finding new work for some of the affected US employees.
"Some people say they don't believe it. But the fact is it is less expensive to repurpose the people than to fire them and hire different ones," she said.
While most companies have stopped disclosing the offshoring of jobs in the wake of the political outcry over the issue in 2002, analysts say there is no sign the trend has abated.
IBM says it will pay for retraining and give employees threatened by offshoring more time to find an in-house job.
Those facing the possibility of a lay-off will get at least 60 days' warning and often more, rather than the 30 days of the past.
In late June, IBM notified hundreds of people in a 5,000-person group that their jobs might be moved abroad and that they should start evaluating their skills and looking at options.
One person in the group told the Journal that the notifications had "a devastating effect on morale." Another said that though she is a 20-year veteran, she is constantly scrambling to lock in future assignments.
Yet, the paper said, the new policies have already made a difference for a group working in Fort Wayne, Indiana, under IBM's contract. Eight of the 16 members, who were told that their jobs were being moved to India, have found new jobs within the company.