IBM will hire 15,000 new employees — 50 percent more than originally planned — in areas like software and services because of a rebound in the economy, a top executive said Saturday.
Armonk, New York-based International Business Machines Corp., which has faced criticism for its plans to shift some U.S. workers to cheaper locations such as India and China, will add about 4,500 net jobs in the United States this year, according to Randy MacDonald, IBM’s senior vice president for human resources.
“We are going to hire more in the U.S. than we shift” overseas, MacDonald said in an interview.
About 30 percent of the 15,000 new positions, or 4,500 jobs, will be net new hires in the United States, he said.
In total, the move will increase IBM’s workforce by nearly 5 percent to about 330,000 or more depending on attrition. That number is the highest since 1991 when IBM began a decade-long overhaul under former Chief Executive Louis Gerstner.
More than half of IBM’s employees are outside the United States.
The company plans to move up to 3,000 jobs from the United States to developing nations in 2004, an IBM spokesman said. A Wall Street Journal report in December that said the company would shift 4,730 software jobs to India was incorrect, MacDonald said.
New growth cycle
The raised hiring target follows news from the world’s largest computer company that customers started buying more technology during the fourth quarter. IBM Chief Financial Officer John Joyce described 2004 on Thursday as “the year when the IT industry will begin its next growth cycle.”
The technology industry is emerging from a three-year slide caused by a weak economy, computer overcapacity and cuts in corporate spending. While consumer spending recovered in 2003, corporate buying lagged.
Last fall, with signs of growth starting to emerge, Chief Executive Samuel Palmisano said IBM would hire 10,000 new employees in 2004 in “hot” segments, such as software for doing business over the Internet and services to support wireless technology and the growing Linux operating system.
The decision to add 5,000 jobs was made in the past few weeks, MacDonald said.
Discussing where the hiring will occur, MacDonald said that was a matter of the availability of the technical skills and customer needs, as well as cost. IBM’s plans do not favor one geographic region over another. He said that Asia Pacific is the company’s fastest growing region.
Moving jobs overseas has become a hot political issue as U.S. corporations build foreign workforces to try to cut costs. IBM services competitor Accenture Ltd., for instance, plans to double its staff in India to 10,000 this year.
MacDonald said IBM also would raise to 50 percent from 40 percent the number of its new staff directly from college. The rest will have previous professional experience. In 2005, IBM plans to increase the percent of new hires from a university to 60 percent, he said.