IBM Workers Strike Over Transfer To Lenovo

Lenovo has said that a strike at an IBM factory in China is an ‘internal matter’ for the latter to sort out, as the two companies work to finalise the terms of a £1.4bn deal for IBM’s x86 server business.

Workers at IBM’s factory in Shenzhen have been on strike since last week concerning the terms under which they will transfer to Lenovo if the deal goes through. However, the Chinese manufacturer says that it can offer nothing until its deal to buy the latter’s server business has been officially ratified.

“Lenovo and IBM are two independent companies,” Lenovo said in a statement on its website, “Any integration between Lenovo and IBM’s x86 server department will not be conducted until the deal is closed”.

Internal matter

Stating that the strike was an ‘internal matter for IBM’, Lenovo said that the deal between the two companies, which will include the transfer of 7,500 employees across 60 countries, is still subject to the approval of relevant government and regulatory authorities.

However, it  pledged to maintain the salaries and benefits of all workers that chose to stay with the company after the deal is completed, stating that their knowledge and experience would be key to its continued success.

“To ensure a smooth transition, Lenovo is committed to provide opportunity for all employees from IBM’s x86 server department who transfer to Lenovo, without any reduction of their wages and benefits,” the statement continued.

Reuters reports that some of the striking workers have now returned to work, although many remained on strike or had quit.

Lenovo, which was ranked as the world’s largest PC manufacturer last year by Gartner, announced the purchase of IBM’s x86 server business for around £1.4bn in January. Under the terms of the deal, which will provide Lenovo with the third largest x86 server business in the world, workers in areas such as product development, manufacturing, sales and marketing will be affected.

IBM is currently going through a company-wide $1bn ‘restructuring’ process as it looks to improve the company’s finances and reposition itself in a changing marketplace.

Part of these efforts concern widespread job cuts, with the majority of layoffs coming from its Systems and Technology group, the business behind the company’s server products, which could see 25 percent of its staff cut. The Lenovo deal will facilitate some of these layoffs, and IBM is also rumoured to be considering selling off its semiconductor business, with sources claiming that investment bank Goldman Sachs has been called in to advise the company on a possible sale.

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