Approximately 200 workers, including “blue-collar” workers involved in manufacturing and “white-collar” workers in managerial and executive positions, have been retrenched from the International Business Machines (IBM) plant at the Singapore Technology Park.

An IBM subcontractor told TODAY Online last month that two layoffs have already taken place in May and June, and that a third exercise was scheduled to take place at the end of July.

The retrenchment exercise was reportedly carried out as a part of the relocation of its Power Systems product manufacturing process to a facility in Guadalajara, Mexico.

Responding to TODAY Online‘s queries, the American multinational technology company, which has its headquarters in New York, rationalised the move as a part of its “continual review of the most efficient way to source our products”. 

Earlier this year, it was reported that IBM had planned to retrench as many as 10,000 of its staff globally, and to shift as many as 30,000 staff from its workforce pool to new positions in a bid to restructure its Global Technology Services division.

The computing firm, however, has declined to reveal the number of workers who have been retrenched in Singapore.

The number of workers being laid off accounts to nearly 40 per cent of the total number of staff at the local IBM plant, according to an IBM engineer whose date of termination was moved to the end of July.

In an interview with TODAY Online, IBM staff estimated that around 400 to 600 people are currently working at the Singapore facility.

On 29 June, a reader, whose contract as “a Logistics Service provider to IBM” was scheduled to cease at the end last month, has alerted TOC to an impending layoff exercise at the IBM Singapore plant in Tampines:

Many Singaporeans will be jobless here due to a major relocation of manufacturing plant to Mexico.

By today [29 June], [between] 3pm and 5.30pm, many employees from IBM will be walking out from the Tampines Industrial Avenue 5 looking for a new job. 

This lay-off is part of a 3-phase retrenchment which will take effect on 31 May, 30 June, and 31 July 2018.

Screenshot of the reader’s submission on 29 June alerting to the impending retrenchment exercise at the IBM Singapore plant in Tampines.

In his submission, the reader also stated that the retrenchment exercise will affect approximately 500 to 600 employees. 

He elaborated:

This should be a hit on unemployment figures in Singapore, whereby a major age group between 45-55 will find it hard to secure a new job, at least for a while, as [the] job market is not as rosy as before.

Another reader, who is a contract staff with Geodis Wilson, also sent in his submission that “The news of IBM moving to Mexico was announced by IBM on May 02”, and that “the company started the lay-off at the end of May for all contractual staff”.

He also said that the retrenchment exercise in May was followed by another on “29 June.”

He mentioned that the next retrenchment was scheduled to have taken place on 31 July, and that “based on insiders’ [alerts], there will be another batch in August.”

The reader said:

It was a rather disappointing news to Singaporeans working here, as our hope was to be able to work for another 2 years. Plus, […] our Management announced last October that IBM has renewed our contract for 3 years, with effect from Oct 2017, and was due to last until Sept 2020.

However, when the finalised retrenchment package was announced to us by a Junior Manager without the presence of Human Resources Department at 3pm on 29 June, we were told that the company will only pay us 2 weeks per year of service as permitted the Employment Act (Clauses 18 and 19), and subsequently rejected our claims for a pro-rated annual wage supplement (AWS), which was normally paid to us at the end of December, stating that we did not complete a 12-month cycle to be entitled.

The news was shocking to us, as our Operation Manager has stated during the first announcement to re-size our operations that he will try to seek compensation from IBM.

However, a Junior Manager told us two weeks later that IBM has refused to compensate us at all.

Most of us could not accept the reasons that they had given us.

Thus, we have started a petition among 18 Singaporeans (some are NTUC members) to get NTUC to seek clarification from the company and the Ministry of Manpower pertaining to this issue.

Furthermore, some of our friends who have worked in IBM have told us that they were paid one month for each year of service, as well as one-month’s notice pay (even though the announcement was made known much earlier), plus a full AWS payment.

Several affected staff were former IBM staff before the logistic contract was awarded to Geodis Wilson in 2009. We were told by IBM that Geodis will follow the pay-out according to what IBM has been doing for their staff.

After 9 years, we wonder if IBM has made empty promises or if Geodis has short-changed us by hiding behind the Employment Act minimum requirement in order to profit from this retrenchment exercise.

Furthermore, if a tangible number is given, the amount of pro-rated AWS will only work out to approximately S$40,300, which is equivalent to €25,266, which I do not see as a significant impact to the finances of such a big French logistic company.

Lastly many of us are already past 50 [years old], so the half-month may not be significant to some [of them], but to others who still have primary school-going kids and mortgages to pay, [it] will help in some way or another. 

Is Singapore, being a First World nation, putting a blind eye to the working class layman?

When asked, the reader noted that the petition was sent to United Workers Of Electronic & Electrical Industries (UWEEI), a labour union under the National Trades Union Congress (NTUC).

Previously on 29 June, TOC had repeatedly tried to contact IBM Singapore for its comments regarding the potential closing of the manufacturing plant in Tampines by the end of July.  However, TOC was directed to an email that does not work.

Eventually when contacted, IBM Singapore’s representative sent the following email, which appears to be a generic answer:

Screenshot of IBM Singapore’s response via email to TOC’s queries, dated 23 July.

IBM’s refusal to “comment on rumours and speculations” as well as the “policies and actions of other companies” as stated in the email refers to questions fielded by TOC regarding the situation of the aforementioned readers – that is, the former IBM Logistics Service provider and the former Geodis Wilson contract staff.

Separately, on 25 July, TOC contacted UWEEI regarding the petition by the former Geodis Wilson contract staff affected by IBM’s retrenchment exercise. However, TOC has yet to receive a response from UWEEI to date.