November 5, 2008 IBM layoffs cause community concerns Play video

(Anya Huneke, NECN: Essex Junction, VT) - Another round of layoffs at big blue in Vermont. The microchip plant in Essex Junction has cut 100 temporary positions. And while IBM is calling this a single event, some are concerned the company - and the surrounding community - may be in trouble.

At X-ray's barber shop in Essex Junction, Vermont. Patty Wells and Trish Cook hear all the town news and gossip. Including rumors about the IBM plant down the street- the state's largest for-profit employer.

"We hear probably on a monthly basis that they're talking about laying off people."

And this week .. The rumors proved to be true. IBM is laying off roughly 100 employees-- five months after laying off 180... And three months after reducing the pay of some workers.

Patty "With a hundred here, then the last layoff, and the one before- they're getting down to a very few people."

The company says the layoffs affect temporary manufacturing employees- hired for 1 to 3 years as part of a flexible workforce. An IBM spokesperson tells us this is in response to changing business requirements-- these positions, he says, tend to fluctuate.

"In the early part of the decade, the IBM facility here in Essex Junction employed about 8,500. But layoffs since then have brought that number down to about 5,400-- and that has many wondering- what's next?"

Trish "There's people who keep hoping every day they'll make it to retirement."

Art Woolf\Economist

Art Woolf - associate professor of economics at the University of Vermont - sees this round of layoffs in a larger context: a slowing economy... Decreased demand for many products... And rising unemployment rates.

Art "We've lost about 1,000 jobs in the last year. Percentage-wise it's relatively small, but 1,000 still 1,000 in a small state like Vermont."

He anticipates there will be more layoffs across the state. And more fodder for discussion among Vermont lawmakers.

"Economic issues are going to dominate the legislature come January."

Meanwhile .. Many in Essex worry about the future of IBM...

"The morale of people that work there is very bad."

And about what more layoffs could do to this community.