Sunday, November 14, 2010

IBM Cancels Irish Server Works

IBMIn a recent report from the Irish Times, it appears that IBM is cutting off what is left of the server manufacturing jobs at the company's Emerald Isle factory. The reason for the loss is said to be due to the fact that IBM is shifting its server-making to factories the company owns in Shenzhen, China.

With this cutback IBM has lowered its overall workforce in Ireland to around 4,000 employees. This number does include the 190 jobs that IBM just cut as well as 200 employees that the company recently added back in March for a Smarter Planet research center and an additional 100 added to the company's software labs around the country.

IBM released in a statement not too long ago that they were moving their high-end server manufacturing for the Asia/Pacific and EMEA regions to factories in Singapore. IBM did note that they were keeping a "foot in the door" in the European Union by keeping entry and mid-range server manufacturing in the factory IBM has in Mulhuddart, which lies just outside of Dublin.

IBM has also shut down and outsourced all of their x64 server plants located in Scotland aside from very high-end System z and BladeCenter platforms. The Power Unix manufacturing that IBM had in Austin, Texas was also recently moved to Rochester, Minnesota.

Due to this recent cut in jobs, Ireland will be out of the IBM server manufacturing business completely. This also raises questions as to when IMB's mid-range Power Systems will be shifted to China as well. IBM said that they will try to find jobs for as many of the 190 employees as possible. IBM said that all of the 190 employees will receive five weeks of severance pay for every year they served with the company.

According to IBM, "This change will place us closer to our growth markets and suppliers while providing greater operational efficiency and cost savings." The shipping costs to get Power and z10 processors to China or Singapore are fairly small. However, the expensive shipping costs it takes to transport finished Power Systems and mainframe servers to European and African customers is definitely offset by the lowered labor costs of China and Singapore.
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