Dive Brief:
- IBM began laying off many of its workers this week as part of its strategy to reinvent its core business. In January, IBM announced plans to lay off staff in its Global Technology Services department.
- Nearly one-third of the U.S. workforce is being "rebalanced," according to a report from the International Business Times. The company employs an estimated 378,000 employees worldwide.
- While there are widespread job cuts, with some positions moving offshore, IBM also recently hires 70,000 new employees in areas where it is looking to grow, like cloud computing. The company says it also has 25,000 open positions.
Dive Insight:
IBM has been looking to build its cognitive computing, cloud and IoT businesses and shift away from its older business platforms. Some believe the layoffs are a sign the company is not shifting its business model fast enough to remain profitable. Yet the company is continuing to purchase other businesses and make strategic partnerships to increase its services, like the recent deal with VMware to help customers move their cloud workloads.
The layoffs come just months after IBM announced it was buying the Weather Company’s digital assets, an acquisition valued at more than $2 billion.
IBM has also seen changes in company leadership. Three high-ranking executives left the company in December. Then in February the head of IBM’s cognitive computing group, responsible for Watson, left the company after just nine months.
The exact number of employees losing their jobs is unknown and impacted employees are only receiving one month's severance pay, according to reports. One individual said employees were given 90 days of paid working notice. Some people impacted by the layoffs are also reporting that some work is moving offshore, to places like Hungary and Brazil.
