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IBM memos detail overseas jobs savings

IBM expects to save $168 million annually starting in 2006 by moving several thousand high-paying programming jobs abroad, according to internal company documents obtained by The Wall Street Journal.
/ Source: Reuters

IBM expects to save $168 million annually starting in 2006 by moving several thousand high-paying programming jobs abroad, according to internal company documents obtained by The Wall Street Journal.

International Business Machines Corp. has said it plans to move up to 3,000 jobs from the United States to developing countries this year. The Journal story did not say how many jobs the company expected to shift overseas starting in 2006.

IBM spokesman John Bukovinsky said he had not seen the documents cited by the Journal, but said the company had not determined how many jobs would be shifted abroad in 2006 and it had not made any financial projections for savings from overseas jobs starting that year.

"Any reference to potential savings is wild speculation," he said, referring to the figures in the Journal story.

"To suggest what the savings would be in 2006 means you would have to know the number of jobs to be shifted," he said.

The Journal said the documents indicate that for internal IBM accounting purposes, a programmer in China with three to five years of experience would cost about $12.50 an hour, including salary and benefits.

That's compared with $56 an hour for a comparable U.S. employee, the Journal said, citing an unidentified person familiar with the company's internal billing rates.

Separately, Armonk, New York-based IBM said on Saturday that it plans to hire 15,000 new employees this year -- 50 percent more than originally planned -- in areas like software and services because of a rebound in the economy. The company said about 4,500 net jobs will be added in the United States.