SINGAPORE, April 12 — Nine years after it opened with much fanfare, global technology giant IBM’s manufacturing facility in Tampines will be shut, with the remaining workers to be laid off.
The shutting of the IBM Singapore Technology Park comes after several rounds of retrenchments were carried out between May and July last year.
In an email reply to TODAY, the American firm said that the manufacturing of its mainframe computers, known as IBM Z, will move to Poughkeepsie, New York in the United States.
It also said that the move is a result of “IBM's continual review of the most efficient way to source (its) products”.
“Poughkeepsie already manufactures IBM Z, thus it already has the required skills, procedures, tools and manufacturing expertise,” it added.
Headquartered in New York, the tech firm declined to reveal the number of workers being retrenched except to say that “all affected employees will leave by the end of July (2019)”.
Several IBM staff members and subcontractors, who spoke to TODAY on the condition of anonymity, said that the majority of the employees — at least 70 per cent — will leave the company at the end of this month, while the rest will leave at the end of July.
Two of them, from separate teams with a combined strength of more than 50, each said that their whole team will be gone.
They were notified of the plant’s closure and their impending retrenchment in early March.
IBM’s employees will be receiving one month of salary for each year of service as part of their compensation package, while those working for its logistics subcontractor Geodis will be receiving two weeks of salary for each year of service.
Under Ministry of Manpower (MOM) guidelines, companies are encouraged to pay retrenchment benefits of between two weeks and a month’s salary for each year of service, depending on the company’s financial position and the industry.
For unionised companies such as IBM, the norm is one month’s salary for each year of service.
TODAY previously reported that at least 200 of IBM's staff members and its subcontractorswere being retrenched out of the estimated 400 to 600 workers in the Tampines plant.
The manufacturing of its Power Systems product was being relocated to Guadalajara, Mexico then.
At that time, IBM said that the manufacturing of its IBM Z products will continue at the Singapore Technology Park in Tampines.
Since a batch of workers were let go in July last year, workers told TODAY that morale at the workplace has definitely taken a hit.
“We are losing colleagues, people we have been working together with for so long. … It’s like losing friends, you know,” said one male employee who has been working at the Tampines plant for more than 10 years.
Another worker said that he was not surprised when told of the plant’s closure and that his last day of work will be at the end of April.
“When the last batch was retrenched (last July), we knew those of us left behind won’t stay for too long… There were rumours that the plant will close in another six months to a year,” he said.
The manufacturing plant at Tampines opened in 2010 with an inauguration ceremony officiated by then Finance Minister Tharman Shanmugaratnam.
The S$90-million (RM274 million), 365,000-sqf facility was meant to serve clients using high-end systems, in Asia, Africa and Europe.
When asked about IBM’s plans for the space it has leased from industrial property developer JTC, the tech firm said: “No decision has been made concerning the future use of the space to be vacated.”
IBM said that Singapore remains a “strategic location” for the company. Its other business units, for example, its IBM Watson Centre at the Marina Bay area, its management, software, blockchain and other services organisations will not be affected.
“IBM has been in Singapore for 66 years. It remains committed to being an essential part of its growth, and is working with many companies in Singapore to enhance its position as a worldwide innovation hub,” a company spokesperson said.
Several media outlets reported earlier this year that IBM had planned to slash 10,000 staff members from its global workforce and re-assign another 30,000 to new roles, as part of a restructuring of its global technology services division.
The 107-year-old company reaped a profit of about US$8.7 billion (RM35.8 billion) last year, which is about a 52 per cent increase from a year ago.
Its fourth-quarter earnings results showed that IBM Z’s revenue declined 44 per cent, compared with the same period a year ago. This was after five consecutive quarters of revenue growth of IBM Z since the launch of its latest z14 microprocessor in mid-2017.
A spokesperson from MOM’s Taskforce for Responsible Retrenchment and Employment Facilitation told TODAY that IBM had notified the ministry of its retrenchment exercise.
For workers who are retrenched, Workforce Singapore and the Employment and Employability Institute (e2i) of the National Trades Union Congress (NTUC) will offer employment services support through the Adapt & Grow initiative, the spokesperson added.
Mr Melvin Yong, the executive secretary of the United Workers of Electronics and Electrical Industries, said that the union was also notified in advance by IBM about the retrenchments and that it working closely with the company to help the affected workers.
“The union is also working with the NTUC’s e2i to provide employment-related and placement assistance to these workers," he said. — TODAY
