IBM Layoffs: Thousands Lose Jobs as Big Blue Swings the Axe

IBM Watson building in SOMA – San Francisco, California

IBM is cutting an unspecified number of jobs in its first major workforce reduction under the new chief executive office Arvind Krishna.

Armonk, N.Y.-based IBM said in a statement on late Thursday: “IBM’s work in a highly competitive marketplace requires flexibility to constantly remix high-value skills, and our workforce decisions are made in the long-term interests of our business.”

The Big Blue didn’t disclose the scale of the layoffs. Although, it is being speculated that several thousand employees not attached to the cloud lost their jobs.

Bloomberg quoted an unnamed IBM employee reading from internal Slack messages that suggest the layoffs could be in the thousands in the US alone, spanning five or more states.

IBM had around 352,600 employees as of the end of 2019, according to a January regulatory filing.

The question remains open whether the layoffs are focused on cost-cutting to survive in a post-pandemic world, cutting staff from AI-driven initiatives that aren’t performing well, doubling down or cloud services, or all of the above.

IBM foreshadowed cost-cutting measures in its Q1 2020 financial results on April 21. The company’s chief financial officer Jim Kavanagh told investors: “We’ve taken quick and prudent actions to manage our cost and expense, further improve our liquidity position, and focus on opportunities to emerge stronger.”

Dumped IBMers will receive “subsidized medical coverage through June 2021.”

Tech giants across the globe have taken to cutting jobs in an effort to survive amidst the novel coronavirus outbreak. HP on Thursday announced an all-comprehensive cost-cutting program, including hiring freezes, unpaid leave, and salary cuts.

The layoffs come at a time when IBM is ready to make a push in the ever-growing field of cloud computing and strengthen its AI activities. The Big Blue is also planning to divest parts of its business that are not linear with that focus.

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