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IBM Layoffs 2016: U.S. Job Cuts Begin

IBM is cutting an undisclosed number of U.S. jobs as part of a “workforce rebalancing” toward cloud and analytics technologies, according to Bloomberg and IEEE Spectrum. ChannelE2E has not independently confirmed the layoffs.

Overall, IBM’s growth businesses — cloud, cognitive computing, mobile and security — continue to perform well and accelerate very rapidly. In fact, IBM is finally expected to disclose deeper details about its cloud revenues during future earnings calls in 2016. The company also overhauled the IBM PartnerWorld partner program in February.

IBM’s Challenge

Still, the company’s growth businesses aren’t expanding fast enough to offset shrinkage in IBM’s traditional hardware, software and IT services offerings. Further complicating matters, many IBM partners are not equipped for the company’s cognitive computing push — which aims to take analytics to the next level with customers.

During PartnerWorld, some VARs and MSPs complained that’s technology portfolio lacked the nuts-and-bolts platforms customers are demanding. In particular, some partners continue to question IBM’s decision to sell off its x86 server business to Lenovo.

Now comes word of IBM job cuts in the U.S. The company calls it a “workforce rebalancing” — slang for layoffs in lower-demand technology areas while IBM ramps up in growth markets like cloud and analytics.

IBM Slashes Severance

Adding insult to injury, IBM has vastly cut its severance packages — offering one month severance regardless of how long an employee has been with the company, according to Business Insider.

Generally speaking, most severance packages I’ve heard of over the years include roughly two weeks salary for each year of service.

In some ways, the cuts reflect corporate America’s failure to proactively train its employees for the next technology waves. Instead, employees begin to look like commodity products with limited a limited shelf life. The problem isn’t limited to IBM. Plenty of U.S. companies — including IBM rivals like Hewlett Packard Enterprise — use “workforce rebalancing” to push aging skill sets out the door and bring fresh blood into the business.

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5 Comments

Comments

    Don Dieter:

    Just another reason to move beyond IBM, there used to be something called Respect for the Indivual, boy are those days long gone, but glad to see Ginny gets 19.5 million for reducing its market value 35%.

      Joe Panettieri:

      Hey Don: Thanks for your readership and comment. I don’t think “workforce rebalancing” and big CEO paychecks during layoffs are IBM-centric issues. Alas, many tech companies behave the same way.
      -jp

    Emperors NewCloud:

    The very first sentence is a LIE. They are cutting people in Cloud, even new hires. At the same time, overpaid managers and executives with huge bonuses and lavish trips are abundant, all for producing losses. The company is rewarding failure and punishing hard work. Shareholders should wake up… IBM is cutting meat, not fat!! The long term prospects of that will ultimately be dismal. Short term, woohoo the stock pops, because investors are fooled. Hard to believe that Buffet can get conned like this.

      Joe Panettieri:

      Hey Emperors: We welcome reader comments but can you disclose your background? We always push for context.
      -jp

    BLDR:

    These claims are true. You can also add that their contractors are being either shifted or balanced around, some even let go.

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