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July 16, 2009
ARMONK — The good news keeps on coming for IBM, which Thursday reported higher profits despite a weak economy.
In the second quarter, the company made $3.1 billion on $23.3 billion in revenue. While that’s a 13 percent drop in revenue from the same quarter last year, the company squeezed out higher profits, up from $2.8 billion.
The company accomplished that by slashing expenses, including its payroll in the Hudson Valley.
Based on classified employee population reports recently obtained by the Times Herald-Record, IBM now employs fewer than 10,000 workers between East Fishkill, Poughkeepsie and Sterling Forest. Even in its reduced state, IBM is still the region’s largest private employer.
Many of the company’s local workers are part of IBM’s Systems and Technology Group, which is – performance-wise – the company’s weakest. STG reported revenue of $3.9 billion for the quarter, down a full 26 percent from one year ago.
Earlier this year, IBM laid off more than 1,000 workers at the three sites, but wouldn’t confirm it. IBM Chairman, President and CEO Sam Palmisano said only that the company’s staff reductions were mostly over for the year.
Unlike its peers in the tech industry, such as Microsoft, the company refused to give a headcount for the number of people it terminated. That secrecy helped fuel a culture of mistrust within IBM.
“IBM is now forcing work-at-home employees to report to Fishkill in order to mask the number of layoffs that have taken place,” one poster at the union-backed Alliance@IBM message board recently said. “People are being told that they must now commute 30 miles or more each way so IBM can hide what they are doing from New York state.”
IBM spokesman Doug Shelton, however, said that’s not the company’s policy.
“We generally affiliate ‘work-at-home’ employees with the IBM site closest to their home ZIP code, in the same state,” Shelton said. “This practice hasn’t changed in the past year.”
As IBM barrels through the weak economy without skipping a beat, the company said it expects to end 2009 with earnings of $9.70 per share. It had been predicting earnings of $9.20 per share. The company’s goal is to get its earnings-per-share price to $10 or $11 in 2010.
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