IBM Planning to Reassign 30,000 Technology Services Jobs – Report

Mitch Wagner
1/12/2018
50%
50%

IBM has retained Bain & Company to help plan a reorganization of its Global Technology Services business, with about a third of the staff, or 30,900 employees "productively redeployed," according to a report on The Register.

IBM Corp. (NYSE: IBM), which has seen 22 consecutive quarters of revenue decline, is circulating an internal document among senior executives planning the reorganization, which includes a slide showing redeployment of 10,900 people from the domestic market and 20,000 worldwide, according to the Register article published Thursday.

Of the reorganized staff, 9,300 will be redeployed within IBM, and 10,100 are to be classified as "Attrition w/o backfill" -- in other words, staff that will not be replaced as they leave or as their contracts end, The Register says. No word on what will happen to the remaining "redeployed" staff.

"[T]he relentless grind of repeated redundancy programmes across GTS has seen morale on the shop floor deteriorate," The Register says. "Perhaps this will contribute to the numbers of heads that simply decide they've had enough and walk on."

IBM India building in Bangalore.
IBM India building in Bangalore.


Keep up with the latest enterprise cloud news and insights. Sign up for the weekly Enterprise Cloud News newsletter.


Is the Register report true? IBM responded: ""We do not comment on speculation. Many consultants recommend things to IBM, many of which remain merely recommendations."

IBM has seen nearly two years of consecutive quarterly revenue decline, as growth in emerging technologies, including cloud, fail to offset declines in other business. In its latest earnings reported in October, IBM posted non-GAAP revenue of $19.2 billion, down about 1% year-over-year, though it beat analyst expectation. (See IBM's Long Decline Continues, Despite Cloud Growth.)

The company's self-described "strategic imperatives," including analytics, cloud, mobile and security, totaled $34.9 billion for the trailing 12 months, up 10%, accounting for 45% of all IBM revenue. Cloud revenue grew 25% year-over-year to $15.8 billion.

Reorganization would be nothing new for IBM. Employees have joked for decades that the initials stand for "I've Been Moved," notes Daniel Conde, analyst with the Enterprise Strategy Group.

IBM may be planning a bigger reorganization than usual, and calling in Bain to help, Conde says. IBM could simply be moving people from slower-growing or declining areas, to future growth areas, such as cloud and Watson, or existing, healthy businesses, such as storage.

Conde says, "So from a financial perspective, they are basically balancing their portfolio, much in the same way you may rebalance a 401(k)."

IBM has historically tried to move people from one specialization to another, which "has always been a problem for the company, as they don't do education and training very well at all," said a former IBMer, requesting anonymity. "This does make IBMers very resilient and worth an awful lot more outside the company than inside."

This week, VMware confirmed a "small reduction in force" -- in other words, layoffs -- but did not provide specific numbers. (See VMware Confirms 'Small' Number of Layoffs.)

Related posts:

— Mitch Wagner Follow me on Twitter Visit my LinkedIn profile Visit my blog Follow me on Facebook Editor, Enterprise Cloud News

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
kq4ym
50%
50%
kq4ym,
User Rank: Light Sabre
1/20/2018 | 10:08:03 AM
Reorganize Or Else
IBM surely is in quite a spot as the quarterly reports contine with dire news. Noting "22 consecutive quarters of revenue decline," it would almost seem that without comment IBM has to figure some way to halt that record. Redeploying talent would seem to be a way to move forward, although whether the numbers are speculation or real is a good question.
More Blogs from Wagner’s Ring
Equinix is initially testing virtual router and firewall in the US and Europe, with plans to extend into Asia soon, to help make network connections more agile and responsive for enterprise customers.
While networks alone won't deliver enterprise transformation, robust, software-defined networks are needed for enterprises to transform, says Sorabh Saxena, president, business operations for AT&T business solutions.
Telefónica turned to Juniper and Nokia to meet exploding demand in Spain. Upgrade raises network capacity to 10 Tbit/s, with room to grow.
Apple haters have been sounding the alarm for a decade, but this time the bad news is real.
Superior technology isn't enough.
Featured Video
Flash Poll
Upcoming Live Events
September 17-19, 2019, Dallas, Texas
October 1, 2019, New Orleans, Louisiana
October 2-22, 2019, Los Angeles, CA
October 10, 2019, New York, New York
November 5, 2019, London, England
November 7, 2019, London, UK
December 3-5, 2019, Vienna, Austria
December 3, 2019, New York, New York
All Upcoming Live Events
Partner Perspectives - content from our sponsors
Transform Beyond Borders to Lead the Innovation
By Ben Zhou, CEO, Whale Cloud
Reject Limits. Build the Future.
By David Wang, Huawei
China Telecom & Huawei Jointly Complete the World's First End-to-End 5G SA Voice & Video Call
By Jay Liu, Senior Marketing Manager, Cloud Core Product Line, Huawei Technologies
All Partner Perspectives