Faced with sluggishness in the chip-making business, IBM has laid off 600 workers and asked about 3,000 employees, including top executives, to take a week's leave without pay next month.
"These moves are part of our effort to re-establish profitability. Obviously, we are trying to get revenue growing again. At the same time, you have to tackle the cost side of the equation," said Bill O'Leary, an IBM spokesman.
While some 500 workers were laid off at the struggling technology unit at Vermont, about 100 were axed from various plants elsewhere in United States.
"The time off without pay addresses short-term demand and expense issues, and helps reduce the number of people we must lay off," O'Leary said.
IBM, in its quarterly earnings report, had blamed a $111 million loss in its technology unit to problems with its chip business.
The latest announcement follows the 1,000 jobs cut last year in the US as a part of reorganisation of its microelectronics unit. Besides, it had also reduced jobs overseas.
The staff to be axed are mainly in engineering and support ranks but the decision is unlikely to affect those who operate the equipment in the Vermont factory.
However, the axed workers would have two months to find a job within the company.