IBM Prepares Massive Round Of Job Cuts

IBM has reportedly begun large scale job cuts at its US operations, but has denied some reports that up to one third of IBM’s US workforce are being “rebalanced”.

IBM describes any job cuts as Resource Actions, and it comes after Big Blue confirmed last month it was planning staff changes at its research and development operations across the UK as well.

Mass Redundancies

The threat of jobs cuts has been hanging over the heads of staff for a while now.

Early last year IBM was rumoured to be planning to cut more than 100,000 jobs, the largest-ever round of staff cuts in its history, in the face of ongoing revenue declines. But back then IBM denied it was planning such a large scale cull of staff.

But one year on and it looks as though IBM is finally swinging the axe, at least according to the Facebook group, “WatchingIBM,” started by former staffers of IBM.

There is still no confirmation about exact numbers being culled, but IBM did tell TechweekEurope that reports that a third of its US workforce were being axed was “untrue” and “completely outlandish”.

“IBM is aggressively transforming its business to lead in a new era of
cognitive and cloud computing,” IBM said in an emailed statement. “This includes remixing skills to meet client requirements. To this end, IBM hired more than 70,000 professionals in 2015, many in these key skills areas, and currently has more than 25,000 open positions.”

The jobs cuts also come just after IBM changed its severance policy.

Last month IBM changed its redundancy package from six months of benefits down to just one month. IBM is applying this new policy to those staff who lose their job because the position is being eliminated, or to those who achieve an unsatisfactory rating in their performance review.

And it is alleged by some staff that IBM is manipulating performance reviews to eliminate staff.

“I am a GTS Strategic Outsourcing casualty of the mass firing today,” an IBM staffer reportedly said.

“My manager told me it was big and widespread, and I’d be hearing from a lot of people that will also be notified today. My official end date is May 31, 2016 (90 days) and the severance package is 1 month. I was encouraged to look for jobs inside IBM and was told that they are “plentiful” and “open”. Even if I were to believe that, I’m not sure why I would stay, looking over my shoulder every month or so waiting for the IBM axe wielders to come for me again.”

Shrinking By Design

IBM’s corporate ‘transformation to higher value’ continues to cause pain at the company, as both profits and sales declined once again in January.

Indeed, its latest financial results marked Big Blue’s 15th consecutive quarter of declining revenues, despite it concentrating on growth areas such as cloud services and large-scale data analytics, while selling off slower-growing units such as its low-end server business,

For the full year ending 31 December, IBM posted net income of $14.7bn (£10.4bn), down 12 percent. And revenues came in at $81.7bn (£57.5bn), down 12 percent.

IBM chairman, president and chief executive officer Ginni Rometty has previously acknowledged that the company is currently shrinking “by design”.

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