Know more? Email us Local executives were told of the redundancies in a March teleconference, one source said, ahead of a global restructuring plan announced in April. Australian executives were told by the company's New York office they needed to cut about 10 per cent of the Australian workforce this year following disappointing global first-quarter results. The company is estimated to employ between 12,000 and 14,000 staff in Australia. The redundancies add to simmering ICT job losses in Australia due to offshoring and cuts by other giants such as HP. Technology workers in banking and other large industries have reported being fired but only after training people in India, China or the Philippines or workers on 457 visas to do their jobs. Government agencies have also shed IT jobs, with the Queensland Government this month announcing 1700 IT jobs are likely to go. IBRS analyst Alan Hansell, who specialises in advising on outsourcing of IT and the IT skills market, said the IBM job cuts mean there will be fewer IT jobs for Australians. "It's another reason why it's important to review the 457 visa program," Mr Hansell said.

"Why bring people in on 457 visas to do IT work when Australian IT jobs are being shed?" He said the breadth of IBM's services meant the tech giant was "probably finding difficulty in managing them and keeping them profitable". "IBM has made a lot of acquisitions... and it would appear that they have not managed them very well," Mr Hansell said. "I suspect that IBM is going to be in more trouble [soon] as it is losing more of its senior managers and specialist thought leaders." He said he wouldn't be surprised if New Zealand ended up benefiting the most from the cuts. This was because of the country's cheaper real estate, lower mandatory superannuation for employees and lower labour rates. New Zealand also had better English language proficiency than other countries in the region, which he said would help drive productivity when talking with clients.

The restructuring is reportedly going to cost IBM $US1 billion worldwide, including severance expenses. At least 1300 have so far been fired in the US, according to employee group Alliance@IBM. IBM's total global workforce was 434,246 as of December 31. The cuts were estimated by analysts to affect about 2 per cent of its employees, or between 6000 and 8000 people globally, although Australia appears to have been hit harder. Australian IBM clients include Westpac, CBA, NAB, Qantas, MLC, Energy Australia, Shell, David Jones and BHP Billiton. Many of IBM's Australian employees are located on client premises as contractors, while others work at IBM facilities in Sydney, Melbourne, Perth, Canberra and Brisbane. Several hundred Australian employees have already been made redundant, sources who spoke to Fairfax on the condition of anonymity, said. They said the redundancies were being rolled out in three or five phases, the first beginning at the start of last month, with another planned for July and September.

About 450 staff at IBM's Global Business Services division are expected to go by June 30, one source said. Many support staff at the company's Ballarat facility in Victoria are also expected to go by the end of the month. "From what I've seen it's going to take all year to move that [10 per cent] number," another source said. "It'll be dependent on how quickly work can be moved to the global team." The cuts are targeting employees with a range of seniority, from managers to rank-and-file workers. One sacked employee said he was let go while on holidays. "I was foolish enough to answer a call from my boss [while on leave] who said 'Guess what? You're going to be made redundant'. So I guess I'm pretty annoyed by the shabby treatment more than anything else."

Many of the roles were being sent offshore to Asian countries including the Philippines, Malaysia, India and China, numerous sources said. A number of sources also said that New Zealand was being looked at too. "I had several project managers who reported to me whose job contracts were not renewed and their functions moved to India," said one. Last week the Australian Services Union said it believed about 1000 roles would be axed. But it could not confirm a figure as the majority of employees are not union members. Further, because IBM is not listed on the ASX, it is not required to announce local redundancies. An IBM Australia spokeswoman declined to comment on specific details of the lay-offs or offshoring, but reiterated a statement given to Fairfax last week which said "change is constant in the technology industry and transformation is an essential feature of our business model".

"Consequently, some level of workforce remix is a constant requirement for our business. Given the competitive nature of our industry, we do not publicly discuss the details of staffing plans," the spokeswoman said. IBM staff members who spoke to Fairfax said morale was "awful" and that many employees were fearing they would be the next asked to go. "This is the company where the bad news is never announced to the staff," one former employee said. They said many of their colleagues, including senior project managers, were asked to leave. "These are highly skilled people... who spend their times in front of the clients."

Another said the process had been poorly managed. "It's being formally communicated directly to affected employees. Fine, that bit is structured, HR is involved etc... It's the rest of the team... where it's not even being communicated at all. It leads us to believe 'Am I the next one?' "You sometimes only find out if someone has left when you send an email and you can't even type their address." This reporter is on Facebook: /bengrubb Follow IT Pro on Twitter