Vermont Bears Brunt of IBM Cuts

Nearly 1,000 of the 1,500 jobs lost in IBM’s restructuring Tuesday will come from the company’s
Burlington, Vt., computer chip plant.

At a news conference, Vermont Gov. Howard Dean said the cuts were “very bad news.” State officials however were prepared for larger cuts and believe the
reductions are over for the foreseeable future.

Armonk, N.Y.-based IBM is the Vermont”s largest employer, supporting 8,000 jobs (before this round of job paring.). The company is looking to cut costs and
improve efficiency.

The remaining 500 positions will be trimmed from Big Blue facilities in Endicott and East Fishkill, N.Y.; Lowell, Mass; Raleigh, N.C.; Austin, Texas and Encinitas,
Calif. In all, the layoffs account for about 7.5 percent of IBM’s Microelectronics Division workforce.

As a result, IBM, which is coming off a bad quarter, will take a pre-tax charge of approximately $2 billion to $2.5 billion, primarily in the second quarter.

“These include charges associated with the company’s exit from the hard disk drive business, write-offs of assets in the Microelectronics business, and charges
related to productivity initiatives, principally workforce reduction,” IBM said in a statement.

Earlier Tuesday, Hitachi agreed to spend $2.05 billion for the bulk of IBM’s hard disk drive assets.

Initially, the Japanese electronics behemoth would own 70 percent of the new company and make payments to Armonk, N.Y.-based IBM before taking full
ownership after three years.

Shares of IBM rose 0.91, or 1 percent, in morning trading. In the last 52 weeks, the issue has ranged from 75.92 to 126.39.

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