IBM To Sell Off Two-Thirds Of The Rochester Labs
May 9, 2016 Timothy Prickett Morgan
This news is not entirely unexpected, but it is difficult just the same. The word on the street is that IBM will be selling off about 2 million square feet of the legendary Rochester Labs in the coming year. That is about two thirds of the capacity of the facility, which once housed over 8,000 employees and was the center of gravity for the IBM midrange since it was conceived in 1969.
The Rochester Labs, which were established in 1956, are a bit older and were part of the geographic distribution that Big Blue has always liked in its operations, and in this case, IBM set up a high-tech facility that was within the cultural umbrella of a hot-bed of supercomputing and related technologies that itself and others have benefitted from over the years. There is a reason why so many processor, memory, disk drive, and operating system innovations were embedded in the System/38 and AS/400 systems and why so many technologies that were developed there live on in the Power Systems line today.
But IBM has not had manufacturing operations in the facility for almost three years now, having moved Power Systems manufacturing for the Americas region to its factories in Guadalajara, Mexico, back in March 2013. Back when that decision was made, best guesstimates were that IBM had around 2,800 full time employees, and about 200 full timers and 150 part timers would lose their jobs when the manufacturing operations were relocated.
We have no idea how many employees IBM has in the Rochester Labs these days, but in a statement from Tory Johnson, vice president of supply chain engineering and the top exec at the labs, IBM said that no one would be losing their jobs as they were relocated to eight of the buildings on the east side of the campus. Johnson added that the consolidation of IBMers into offices set up for more agile and collaborative workspaces would be completed by March 2017.
Of the 2 million square feet that IBM wants to sell, approximately 100,000 square feet of space is already getting the tire kicking from outsiders, according to a report in the Minneapolis/St Paul Business Journal. The Rochester Post-Bulletin reports that IBM has around 2,500 employees there, which is consistent with the numbers we have heard. The Rochester Labs had a peak of around 8,100 employees back in 1990, and by 1999, it had around 7,000 employees, and in 2007, that had dropped to around 4,400, and by 2012, it was in the range of 3,200. To give you a sense of the size of this place, the Rochester Labs, at 3 million square feet of space, are about half the size of the Pentagon.
The shame is given that Rochester, Minnesota, is consistently rated as one of the best places in the United States to live that Big Blue could not find some way to fill the facility as it has done over the past five decades as technologies shifted, sometimes with tectonic violence. We know that Rochester has a challenge in that it only has two seasons–winter, and getting ready for winter–but the quality of life in these places was high particularly because there were good paying jobs for people to support a community. IBM benefitted from and further cultivated a technology ecosystem in the area, along with the universities in Minnesota and Wisconsin and Iowa and Control Data and Cray, and this is precisely the kind of thing that any Smarter Cities analysis would show. It is amazing that IBM has as many employees that it does in Rochester, considering how much it has slashed its payrolls in three decades here in the United States. And plenty of cynics think that this is the beginning of the end for IBM’s presence in the facility.
Time will tell. But the heart of the IBM midrange will always been in those cornfields, no matter what Big Blue does.