Editor’s note, April 13, 9.40am: The previous headline has been amended from “600 retrenched” to “all workers retrenched” as it is not clear how many workers who are full-timers are still left in the company and who will be axed in this current retrenchment exercise.

A nine-year-old IBM manufacturing facility in Tampines will be shut down and hundreds of workers retrenched, Today reported.

All affected employees will leave the IBM Singapore Technology Park by the end of July 2019.

IBM released this information in a statement to Today, but declined to reveal the full extent of the number of workers retrenched.

According to a previously reported estimate by Today, at least 200 of IBM's staff members and its subcontractors were retrenched in 2018.

There are possibly a few hundred staff who will be axed this time as the Tampines plant has an estimated 400 to 600 workers.

Ongoing retrenchment exercise

The current retrenchment exercise is not new as a previous phase was already carried out between May and July 2018.

An estimated 200 staff were given the cut in mid-2018.

The manufacturing of the Power Systems product was being relocated to Guadalajara, Mexico then.

IBM said that the manufacturing of its IBM Z products will continue at the Singapore Technology Park in Tampines at that time.

Why is the Tampines facility closing down?

Some workers said they were informed of the plant’s closure and their impending retrenchment in early March 2019.

The facility manufactures its mainframe computers, known as IBM Z.

The 107-year-old company is profitable, but fourth-quarter earnings results showed that IBM Z’s revenue declined 44 percent, compared with the same period a year ago.

Since the launch of its latest z14 microprocessor in mid-2017, there were five consecutive quarters of revenue growth for IBM Z.

It will move operations to Poughkeepsie, New York in the United States.

IBM is headquartered in New York.

IBM had planned to slash 10,000 staff members from its global workforce and re-assign another 30,000 to new roles.

This is part of a restructuring of its global technology services division.

Compensation package

As compensation, IBM’s employees will be receiving one month of salary for each year of service.

Those working for its logistics subcontractor Geodis will be receiving two weeks of salary for each year of service.

Ministry of Manpower (MOM) guidelines state that companies are encouraged to pay retrenchment benefits of between two weeks and a month’s salary for each year of service.

MOM’s Taskforce for Responsible Retrenchment and Employment Facilitation told Today that IBM had notified the ministry of its retrenchment exercise.

The National Trades Union Congress (NTUC) is working to provide employment-related and placement assistance to these workers, the United Workers of Electronics and Electrical Industries union said via its executive secretary Melvin Yong.

Opened in 2010

The S$90-million, 365,000sqf manufacturing plant at Tampines was opened in 2010.

The inauguration ceremony was officiated by then Finance Minister Tharman Shanmugaratnam.

The space is leased from industrial property developer JTC.

It will be vacated.

Top photo via