Report: IBM Employees Bracing for Massive Layoff Starting Next Week
IBM is set to begin laying off what could amount to 26 percent of its global workforce next week, according to one report on the rumored firings.
Last October, IBM (IBM) chief executive Ginni Rometty vaguely hinted the company’s self-styled makeover to analytics, cloud, mobile and security specialist could mean yet another round of layoffs, following last year’s firing of 10,000 workers with another 1,700 shown the door in 2013.
But that was small potatoes compared to what might hit IBM next week amid one report the vendor is prepping to lay off what could amount to 26 percent of its global workforce. If events play out as a Forbes report by noted IBM watcher Robert X. Cringely outlines, by the end of February some 100,000 IBM workers could be gone.
If enacted, the layoffs would arrive timed to a major corporate reorganization codenamed Project Chrome ending IBM’s hardware, software and service silo history and creating new business units for Research, Sales & Delivery, Systems, Global Technology Services, Cloud, Watson, Security, Commerce and Analytics. IBM’s 11th consecutive quarter of declining revenue might have triggered the vendor to initiate the far-reaching reorganization, said in some circles to be IBM’s largest overhaul in its 103-year history.
At this point, the rumors are flying fast and loose with no confirmation one way or another from IBM or from employees.
Lance Crosby, Softlayer founder and chief executive, is said to have resigned, according to a post at Alliance@IBM, an employee forum. Another poster wrote, “I know for a fact that in my organization (within GTS Services Delivery) my team was targeted with 20% cuts across the board.” And another wrote, “Sounds a lot like Cingely’s 26% is well over the limit, but that does not mean zero layoffs. Be prepared, this is typically the quarter where many heads are chopped.”
Taken at face value, the rumored layoff numbers seem out-sized. For IBM to fire one-quarter of its workforce adds up to potentially getting rid of 100,000 people in one swipe. That hardly seems possible. And it flies counter to IBM chief financial officer Martin Schroeder’s comment on an IBM earnings call last week that the vendor won’t “replicate the same level of restructuring as we did last year.”
By Cringely’s assessment, the Project Chrome-associated firings will affect many of IBM’s worldwide services operations both in the U.S. and other regions of the world. In particular, IBM reportedly will enact deep cuts to its mainframe and storage operations in the U.S., the report said.
With Project Chrome designed to improve IBM’s sagging financials for the next few quarters, the vendor is said to want to stay ahead of business losses in its Global Technology Services business and other units.