IBM to cut pay for some workers

August 6, 2008 8:26:00 AM PDT
IBM is cutting pay by up to 10 percent for some assembly line workers at semiconductor manufacturing plants in Vermont and New York. In January, the company will discontinue premiums for shift employees who work seven 12-hour days over a two-week period, said Vermont IBM spokesman Jeff Couture.

About 3,500 employees at plants in Essex Junction, Poughkeepsie, N.Y., and East Fishkill, N.Y. would be affected but Couture would not say how many at each facility.

Those workers have been earning a 20 percent premium over their wage, plus overtime pay.

Workers would receive a base pay increase in January that would offset the cuts, Couture said.

The announcement comes a little over a month after IBM announced 180 job cuts at the Essex Junction plant, dropping the employee tally to about 5,400, the lowest in more than two decades.

In July, IBM's System and Technology division reported a decline in revenue of $191 million, or 2 percent, over the second quarter compared to last year.

Overall, the company posted a 24 percent increase in net income since June 2007 to $5.1 billion.

Economists predict Fletcher Allen Health Care in Burlington could soon surpass IBM's long held position as Vermont's largest private employer.

The company employed about 8,500 in Vermont in 2001.

John DiToro, the senior location executive of the Essex Junction plant, blames the changes on a volatile global market in consumer-grade semiconductors and competition within the company for investment.

IBM announced in July that it would invest $1.5 billion in New York plants after being offered a $140 million incentive from the state.