"Big Blue" is shrinking, but Rochester is hopeful its ongoing efforts to create jobs will compensate for job losses at IBM.
Specifically, jobs resulting from Mayo Clinic's $6 billion Destination Medical Center initiative and the Mayo Clinic Business Accelerator, comprised of 14 startup businesses in the city-owned Minnesota BioBusiness Center, are among the places where local leaders have pinned their hopes.
"There are going to be job opportunities," said Gary Smith, president of RAEDI, Rochester Area Economic Development Inc. "Are they going to be exactly what they (laid-off IBMers) were doing? Probably not. But perhaps people who are willing to stick around and train for certain jobs, they'll be able to start another career. It's not like there aren't going to be jobs here."
"Some of those are going to be tech jobs, assuming they (biotechnology startups) get off the ground and get in a hiring mode," Smith said.
An undisclosed number of IBM employees in Rochester were told on Wednesday they had lost their jobs, part of IBM's global effort, announced in April, to trim its workforce. Outsiders estimate as many as 8,000 jobs worldwide eventually could be shed; some 1,600 have been cut so far, according to estimates. The action springs from a lower-than-expected earnings report in this year's fiscal first quarter.
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"IBM takes resource actions almost every quarter," Smith said. "It should be no surprise to us that the STG division (the Systems & Technology Group) — if you look at IBM overall, that's the division that's lost a lot of money — and it would be hard to expect that if a resource action is taken, that we would be untouched."
"In terms of how deep, what the numbers are, I just don't know yet," he said. IBM layoffs also hit sites in North Carolina, New York, Massachusetts and Vermont, according to media reports.
The recent layoffs follow an earlier announcement, in March, that IBM would be moving the bulk of its manufacturing from Rochester to Mexico and New York. That decision reportedly cost about 200 jobs locally.
IBM's headcount in Rochester has been in steady decline for the last two decades, falling from a peak of 8,100 in 1991 to perhaps less than one-third of that today, according to estimates. IBM does not give out employment numbers or verify layoff estimates.
Overall, Rochester has been in a languor, jobs-wise, for several years, too, despite a local unemployment rate that's less than 5 percent, slightly better than the statewide average.
"We're still a few hundred jobs down from what we were back in 2007," Smith said. "Even Rochester, when you look at the impacts of the last recession, we were impacted by that. We're not back to where we were, and there aren't too many communities who are, for that matter."
RAEDI will soon be announcing a "major planning initiative" with the Rochester Area Chamber of Commerce, and that, paired with planning efforts in the city government and at Mayo Clinic, Smith said, will help set the stage for jobs growth.
"We think the time is right for that," he said.
