IBM Layoffs To Hit Hardware Division

IBM has begun its company-wide $1bn ‘restructuring’ process with major 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 firm announced last month that it would have to let employees go during the current quarter as it looks to improve the company’s finances and reposition itself in a changing marketplace.

Restructuring

Speaking to CNET, IBM spokesman Doug Shelton confirmed that it would be focusing on several key areas, including cloud, analytics and cognitive computing, and that investment in these areas would be a priority.

“As reported in our recent earnings briefing, IBM continues to rebalance its workforce to meet the changing requirements of its clients, and to pioneer new, high value segments of the IT industry,” Shelton said.

“Already this year we have committed $1 billion to our new Watson unit and $1.2 billion to expand our Cloud footprint around the world,” Shelton said. “In addition, just this week IBM announced a $1 billion investment in platform-as-a-service Cloud capabilities, as well as investments in areas such as nanotechnology which will bring hundreds of new jobs to New York state.”

The layoffs were expected to start on last Wednesday on 26 February, but as company CEO Ginni Rometty was giving a keynote speech at Mobile World Congress regarding the company’s Watson platform, this was delayed until the following day.

The location of the cuts is perhaps not surprising as IBM recently confirmed it would be selling its x86 server business to Lenovo for $2.3 billion (£1.4bn). As part of the deal, 7,500 IBM workers around the world are expected to be offered jobs at the Chinese company.

“This divestiture allows IBM to focus on system and software innovations that bring new kinds of value to strategic areas of our business, such as cognitive computing, Big Data and cloud,” Steve Mills, senior vice president and group executive, IBM Software and Systems, said at the time.

There has also been speculation that IBM is looking to offload it semiconductor business, with sources claiming that investment bank Goldman Sachs has been called in to advise the company on a possible sale, although IBM did not comment on the speculation.

Shelton finished his interview by stating that the job cuts could indicate a great opportunity for workers at the company, saying, that IBM has more than 3,000 job openings at any time.

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