Big Blue Issuing Thousands of Pink Slips Amid Restructuring
By Andrew Berry
Computer-giant IBM has begun the process of laying off employees in the U.S. as part of a worldwide restructuring plan estimated to cost about $1 billion, Bloomberg reports.
Back in April, the Armonk, N.Y.-based company announced plans to reduce its workforce after their first-quarter results fell short of expectations. According to a source speaking to Bloomberg on condition of anonymity, employees ranging from "rank-and-file staff to executives" will be laid off.
Lee Conrad, national coordinator for IBM employee organization Alliance@IBM, told Computerworld that about 1,200 employees in IBM's Systems & Technology group have been laid off, in addition to 200 employees in the research division. Last week, Alliance@IBM said that around 2,800 in software and sales and distribution were laid off, although there is no way to be completely sure of the total number, considering IBM reportedly won't release that information.
"IBM should be as forthcoming as all the other companies," Conrad said. "We just simply don't understand why they are keeping it a secret and neither do the employees."
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IBM (IBM), for its part, refuses to get into specifics about the layoffs.
"Change is constant in the technology industry and transformation is an essential feature of our business model. Consequently, some level of workforce remix is a constant requirement for our business. Given the competitive nature of our industry, we do not publicly discuss the details of staffing plans," IBM spokesman Doug Shelton said in a statement.
"IBM is investing in growth areas for the future: Big Data, cloud computing, social business and the growing mobile computing opportunity. The company has always invested in transformational areas, and as a result we need to remix our skills so IBM can lead in these higher-value segments in both emerging markets and in more mature economies."
Judging by the $1 billion reduction cost, IBM is cutting 6,000 to 8,000 jobs worldwide, Oracle Investment Research analyst Laurence Balter told Bloomberg, meaning that the layoffs will affect less than 2 percent of IBM's workforce, which totals 434,246.
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